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Illinois Employers – Are You Aware of IEPA Amendments?

This article originally appeared in the Novmeber 2019 issue of the Rockford Chamber of Commerce VOICE.

Asking a prospective employee his or her salary history is a long-standing job interview question, and often the starting point for negotiating an applicant’s starting salary. Illinois employers may not realize that as of September 29, 2019, it’s illegal to ask a job applicant this question as a condition of being interviewed, considered or hired. This is just one change resulting from amendments to the Illinois Equal Pay Act of 2003 (“IEPA”), which prohibits discriminatory pay on the basis of sex or race (with a specific prohibition for compensation discrimination against African American employees). The amendments to the IEPA are primarily targeted at closing the gender pay gap, which currently reflects that women in Illinois earn about 21% less than men

Broader in Scope and Tougher to Defend

The amendments change the IEPA’s previous requirement that employers pay equally for work that requires “equal” skill, effort, and responsibility, and now allows comparisons to those with “substantially similar” skill, effort, and responsibility, thereby broadening the statute’s application. The amendments also make it harder for employers to defend IEPA violations by requiring employers to prove that any differences in pay: 1) not be based on or derived from a differential in compensation based on sex or another protected characteristic; 2) be job-related and consistent with business necessity; and 3) that the above two factors account for the difference in pay.

Salary History? Don’t Ask

The IEPA amendments prohibit employers from screening job applicants based on an applicant’s wage or salary history; requiring that an applicant’s prior wages satisfy minimum or maximum criteria; and requesting or requiring as a condition of being interviewed or as a condition of being considered for an offer of employment that an applicant disclose her prior wages or salary. Employers are also prohibited from seeking the salary history of a job applicant from the applicant’s current or former employer. The reasoning behind this amendment is fairly straightforward. Women tend to make less than men, and if employers rely on a woman’s salary at her last job to set her new salary, her salary will continue to lag behind her male counterparts. The lower salary could follow a woman throughout her career.

Employers may wonder what they can discuss with applicants. Employers may still provide information about compensation and benefits for the position at issue. Employers can also ask about an applicant’s expectations for salary and benefits, which may be an indirect way to learn how much the applicant was making without running afoul of the law. Of course, employees can still self-disclose their salary history. Even if they do so, their final salary should only be determined by skill and experience. One nuance is the IEPA amendments allow consideration of salary history for a current employee who is seeking another position with the same employer.

The IEPA amendments also prohibit employers from requiring employees to sign a contract or waiver that would prohibit the employee from disclosing or discussing information about their salary or wages with anyone else. The exception to this rule is that human resource employees, supervisors, or anyone else who has access to other employees’ salary or wage information can be prohibited from sharing that information.

Stiffer Penalties

What happens if an employer violates the IEPA? A plaintiff can file a lawsuit in civil court within five years of the violation. Previously, a plaintiff could only recover lost wages and attorney’s fees and costs. Now, a plaintiff may recover all of his or her actual damages, plus up to $10,000 in “special damages,” costs and attorney’s fees. Employers are also subject to civil penalties of up to $5,000 for each violation for each employee affected.

Next Steps

What should employers immediately do to ensure they do not violate the IEPA? First, make sure job application forms do not inquire about salary history. Then, train everyone involved in the hiring process about the IEPA so they understand what questions are prohibited. Finally, consider the proactive approach of reviewing your current wage and salary data to ensure that any pay discrepancies are defensible under the IEPA.

 

 

Troy Haggestad is a partner at WilliamsMcCarthy LLC with extensive experience assisting clients with employment matters exclusively on behalf of management. He can be reached at 815-987-8977 or thaggestad@wilmac.com.