Just wanted to share a quick post regarding an important new Illinois law that goes into effect Sunday, September 29.

This year, Illinois Governor J.B. Pritzker signed into law House Bill 834, which amends the Illinois Equal Pay Act of 2003 to prohibit employers from inquiring about a candidate’s compensation history. Failure to comply to the Illinois Equal Pay Act may result in legal action, audits and significant financial penalties. The law becomes effective on September 29, 2019.

For more information, see the Illinois General Assembly webpage.

The National Law Review provides the following recommended takeaways:

The 2019 IEPA amendments provide for increased penalties and damages for violations of the law, and applicants and employees have five years to bring a claim. With all of this in mind, employers are encouraged to do the following:

• Promptly engage with external head hunters and internal talent acquisition teams to ensure that they understand the law and the limitations it will impose on the recruiting process;
• Remove any wage and salary history inquiries from job applications;
• Review and revise policies and practices relating to recruiting, interviewing and hiring, and ensure that employees who interview candidates are informed of what they cannot ask regarding pay history, and of how they should handle voluntary disclosures of pay history;
• Review and revise policies and agreements which limit an employee’s ability to discuss compensation, including as may be found in confidentiality and restrictive covenant agreements; and
• Consider whether conducting gender and/or race based pay equity audits with legal counsel is appropriate in order to evaluate (and correct) potential disparities.

UPDATE — The Illinois Department of Labor released this FAQ on September 27th:

1. Can employers ask for salary history or use salary history when determining whether to offer a job or when determining how much to pay the job applicant?
   No. It is unlawful for an employer to request or require a wage or salary history from a job applicant as a condition of being considered for employment or as a condition of employment.
2. Can employers ask about employment benefits that have been provided in the past to a job applicant during the application process?
   No. It is also unlawful for an employer to request or require a job applicant to disclose benefits or other compensation received at any current or former employer as a condition of being considered for employment or as a condition of employment.
3. Who is covered by the law?
   Illinois job applicants. This includes applicants to part-time and full-time positions, temporary or permanent, whether hourly or salary. The law however does not cover independent contractors.
4. Can employers use recruiters to determine applicants’ salary histories?
   No. Recruiters, employment agencies, staffing agency or any other agent of an employer may not screen applicants based on their current or prior wages or salary histories, benefits or other compensation.
5. Can an employer ask a current or former employer of the job applicant for the applicant’s wage history?
   No. It is unlawful for an employer or their agent to ask for a wage or salary history, benefits or other compensation from an applicant’s employer or former employers when conducting verification or reference checks.
6. What if the employee already works for the company where he or she is applying?
   The prohibition does not apply if a job applicant’s salary history is a matter of public record or if the applicant is a current employee applying with the same employer.
7. Can an employer prohibit employees from discussing their salaries?
   No. An employer cannot prohibit its employees from disclosing their own salaries, benefits or other compensation to other individuals.
8. Can job applicants volunteer salary history information?
   Yes. Applicants may voluntarily disclose their prior wage or salary history including benefits or other compensation. The employer shall not consider or rely on the voluntary disclosures as a factor in determining whether to offer a job applicant employment, in making an offer of compensation, or determining future wages, salary or benefits.
9. Can employers provide a salary range to an applicant or discuss with an applicant their salary and benefits expectations?
   Yes. An employer can provide information about the wages, benefits, compensation, or salary offered in relation to a position. The employer can also engage in discussions with an applicant about the applicant’s expectations with respect to wage or salary or benefits.
10. Who do I contact if I have questions about the new law?
    You should call the Illinois Department of Labor at the Equal Pay Hotline 866-372-4365.

Source: Employer Alert: Illinois Amends Equal Pay Act