In recent years, Illinois has enacted a complement of laws designed to address historical pay inequities among genders, races and other protected categories. Those laws prohibit employers from requesting or relying on an applicant’s salary history when making hiring decisions and impose a standard for proving equal pay claims less rigorous than the federal standard. Last summer, we reported here of yet another Illinois equal pay development, when Illinois amended the Equal Pay Act of 2003, 820 ILCS 112/1, et seq. to require certain employers to obtain an equal pay registration certificate from the Illinois Department of Labor (IDOL) between March 24, 2022 and March 23, 2024, and every two years thereafter.
Employers who have more than 100 employees in the state of Illinois and are required to file an EEO-1 report with the EEOC are subject to this certification requirement. The window for obtaining the required certificate opens on March 24, 2022, and IDOL recently announced that it had begun sending notices to employers reminding them to register with IDOL. To register, an employer must provide necessary contact information at the IDOL registration site, which IDOL will use to notify the employer of the date it is required to apply for an equal pay registration certificate. Upon receiving such notification, the employer must then apply for the certificate by the specified date by paying a $150 filing fee and submitting wage records and an equal pay compliance statement. Those wage records must include the employer’s most recent EEO-1 Report and a list of all employees during the past calendar year. That employee list must be separated by gender, race and ethnicity (as reported in the EEO-1 Report) and include the county in which each employee works, date of hire, total wages paid during the past calendar year and “any other information the [IDOL] deems necessary to determine if pay equity exists among employees” (which, based on the template recently issued by IDOL includes the last four digits of the employee’s social security number, termination date [if applicable], job classification and job title). Notably, the employer will also need to submit a statement signed by a corporate officer, legal counsel or authorized agent of the business certifying:
- It is in compliance with Title VII, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act and the Equal Pay Act of 2003.
- That the average compensation for its female and minority employees is not consistently below the average compensation for male and nonminority employees within each of the major job categories in the EEO-1, taking into account mitigating factors such as length of service, requirements of jobs, experience, skill, effort, etc.
- That the business does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex.
- That wage and benefit disparities are corrected when identified.
- How often wages and benefits are evaluated for compliance.
- The approach it takes in determining the level of wages and benefits to pay its employees, with acceptable approaches including, but not limited to, a wage and salary survey.
As previously reported, employers who fail to obtain the required certificate can be assessed a fine up to $10,000. Employers who falsify or misrepresent information on an application can be assessed a similar fine or IDOL may seek to suspend or revoke their equal pay registration certificate.
Given this legal development, employers should begin (if they have not already) to review their current pay practices and compensation structure to evaluate whether they will be able to certify compliance with these new requirements and, if not, how they intend to address any deficiencies before IDOL sends notice that it’s time to submit their application for an equal pay registration certificate. Engaging in a pay equity audit may be a necessary step to identify any deficiencies and gather critical information to devise a strategy for making the necessary corrections.