Chicago Business Litigation Lawyer Blog
Pay equity has become a hot topic of discussion and legislative focus across the United States in the last few years as states seek to adopt stricter pay equity laws and to increase enforcement efforts combating pay inequities for members of protected classes. At the federal level, Congress has introduced legislation aimed at securing pay equity. The Biden administration has also indicated its support for plans to strengthen pay equity between men and women. At the state level, Illinois is one of many states, including California and New York, to have passed or amended pay equity and related laws.
In June 2021, Illinois updated its equal pay reporting and compliance requirements. This amendment followed on the heels of another amendment to the same law passed in March 2021. Illinois Senate Bill 1847 amended the Illinois Equal Pay Act (IEPA) by expanding certain reporting requirements and by accelerating deadlines to certify compliance by potentially up to two years. The June 2021 amendments sought to clarify certain ambiguities in reporting requirements that had been previously identified and to revise the IEPA’s controversial penalty provision. Importantly for Illinois employers, some Illinois employers will be subject to reporting and certification obligations under the IEPA beginning in 2022 instead of in 2024.
The June 2021 amendments to the IEPA apply to private employers with more than 100 employees in Illinois and requires these employers to:
- Apply for an “equal pay registration certificate” from the Illinois Department of Labor (IDOL).
- Pay a $150 filing fee and an equal pay compliance statement to the IDOL.
- Submit their most recent Employer Information Report EEO-1.
- Compile and submit demographic data and wage records.
Equal pay registration certificate
Covered employers in Illinois must apply for an equal pay registration certificate and regularly recertify on a two-year schedule. Employers authorized to do business in Illinois on or before March 23, 2021, have had the deadline for applying to obtain an equal pay registration accelerated to between March 24, 2022 and March 23, 2024. Prior to the amendment, the deadline for registering for the certificate was March 23, 2024.
Illinois employers authorized to do business after March 23, 2021, must apply to obtain an equal pay registration certificate within three years of commencing business operations, but not before January 1, 2024, and must recertify every two years thereafter. The specific date by which a covered employer must obtain this certificate and then recertify will be assigned by the IDOL.
Employers with fewer than 100 employees are exempt from the certificate requirement. A business that is initially exempt but later becomes subject to the certification requirement must notify the IDOL that it has become subject to the requirements and submit its contact information to the IDOL by January 1 of the following year. The employer will then be assigned a deadline for applying to obtain the equal pay registration certificate. Conversely, if the IDOL sends notice to recertify to a business that no longer is subject to the requirements, the business will be required to certify this fact to the IDOL to establish applicability of the exemption.
Employers must be vigilant in determining their covered status and the deadlines for certifying and recertifying. The IDOL’s failure to notify an employer of its application or recertification deadlines does not exempt an employer from compliance, though it can be considered as a mitigating factor when deciding if a violation of the IEPA occurred.
Equal pay compliance statement
To obtain or recertify an equal pay registration certificate, covered employers must pay a $150 filing fee and submit a statement signed by an officer, legal counsel, or agent of the business certifying that:
- the employer is in compliance with Title VII of the Civil Rights Act, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act, and the Equal Pay Act of 2003;
- the average compensation for female and minority employees is not consistently below the average compensation for male and non-minority employees (as determined by the US Department of Labor) when adjusted for lawful differentiating factors such as length of service, job requirements, experience, skill, and effort;
- the employer does not restrict certain genders to specific job classifications and makes employment decisions, i.e. retention and promotion, without regard to sex;
- the business reviews wages and benefits for disparities among protected and non-protected classes and that wage and benefit disparities are corrected when identified; and
Employers must also identify their approach to determining employee wages and benefits. Failure to make a good faith effort to comply with, or being guilty of multiple violations of, the laws identified in this compliance statement can be grounds for suspension or revocation of an equal pay registration certification, in addition to statutory penalties of 1% of gross profits.
EEO-1 and demographic and wage data
Employers already required to file an EEO-1 with the Equal Employment Opportunity Commission must also submit a copy of the EEO-1 to IDOL along with a list of all employees employed during the last calendar year, broken down by the EEO-1’s race, gender, and ethnicity categories, along with corresponding wage information, rounded to the nearest $100.
Violations
Employers found to have violated the IEPA’s reporting and certification requirements can face fines of up to $10,000. It is unclear however whether this will be a single fine for all violations or whether each violation is subject to its own fine of up to $10,000.
Super Lawyers named Illinois business and employment law trial attorney Peter Lubin a Super Lawyer and Illinois employment and wage and hour law attorney Patrick Austermuehle a Rising Star in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois business trial lawyers have over three decades of experience litigating complex wage law, overtime, discrimination, employment law, class action, and collective action cases and various other types of business and commercial litigation disputes. Our Wheaton and Plainfield business dispute lawyers handle emergency business lawsuits involving TROS, covenant not to compete, non-solicitation, restrictive covenant and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist Chicago and Oak Brook area businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0333. You can also contact us online here.