Last week, Illinois Governor J.B. Pritzker signed into law several amendments to the Illinois Equal Pay Act that are certain to have wide-ranging impacts. Most significantly, Illinois will join the growing number of states that prohibit employers from asking about or considering a job applicant’s prior salary history when making hiring decisions. The amendments will also modify an exception to the equal pay requirement that, in certain circumstances, allows employers to pay different wages to employees who work substantially similar jobs, and the amendments will expand the types and amounts of damages that are available for equal pay violations.
The new laws take effect on September 29, 2019, leaving little time for employers to adjust. Here’s what you need to know.
Disclosure of Salary History
With Governor Pritzker’s seal of approval, Illinois now prohibits employers and employment agencies from:
- Screening job applicants based on their current or prior wages or salary histories
- Requesting or requiring salary history as a condition of being considered for employment, interviewed, or receiving an offer of employment
- Requesting or requiring that an applicant disclose salary history as a condition of employment
Perhaps unsurprisingly, the prohibitions do not apply to applicants whose salaries are a matter of public record, or to current employees applying for an internal position. Additionally, an employer may still discuss salary expectations with applicants. And while it would not violate the law for an applicant to voluntarily disclose their salary history without prompting, if an applicant voluntarily discloses salary history, the employer still must not consider that information as a factor in determining whether to offer employment or in determining compensation.
Definition of “Factors Other Than Sex/Race”
The amendments also narrow the exceptions to the act, which allow employers in certain circumstances to pay different wages to employees who work similar jobs. Currently, employers are permitted to pay different wages to employees working similar jobs if the difference is based on either (1) a seniority system, (2) a merit system, (3) a system that measures earnings by quantity or quality of production, or (4) any other factor other than sex or race. While the text of the fourth exemption is broad, the new amendments aim to narrow that exemption. The new amendments establish that a “factor other than sex” or a “factor other than race,” for purposes of demonstrating permissible salary disparities, (1) must not be based on a differential in compensation based on sex or another protected characteristic, and (2) must be job-related with respect to the position and consistent with a business necessity.
Finally, the new amendments will significantly expand the potential damages that are available to employees who establish that their employer violated the act. Damages for equal pay violations will now include compensatory damages if the employee demonstrates that the employer acted with malice or reckless indifference when they violated the act, and punitive damages and injunctive relief where appropriate. Additionally, if an employer violates the salary history disclosure provisions, the employee or applicant may also recover special damages up to $10,000. The statute of limitations under the new law will remain five years from the date of each violation.