Across the country, states are enacting new pay equity laws to address pay inequities for women and minorities, and Illinois is no exception. In June 2021, Governor J.B. Pritzker signed into law amendments to the Illinois Equal Pay Act of 2003 (IEPA), which impose new reporting obligations for covered employers. Beginning as early as March 24, 2022, the State of Illinois will require new equal pay reporting and certification requirements for employers with more than 100 employees in Illinois.
Equal Pay Reporting Obligations
Under the June 2021 amendments, covered employers must:
- Apply for an “equal pay registration certificate” from the Illinois Department of Labor (IDOL);
- Submit employee demographic data and wage records;
- Submit a compliance statement certifying their business complies with state and federal equal pay and anti-discrimination laws; and
- Submit their most recent Annual Employer Information Report (EEO-1 report).
Covered employers are private employers that have more than 100 employees in Illinois and are required to file an annual EEO-1 report with the Equal Employment Opportunity Commission.
Equal Pay Registration Certificate
Covered employers that were authorized to do business in Illinois on or before March 23, 2021 must apply for a registration certificate from the IDOL between March 24, 2022 and March 23, 2024, and must recertify every two years thereafter.
Covered employers that became authorized to do business in Illinois after March 23, 2021 must apply for a certificate within three years of beginning business operations, but not before January 1, 2024, and must recertify every two years thereafter.
The IDOL will communicate directly with businesses when it is their time to apply for an equal pay registration certificate, no less than 120 days before their assigned application deadline. The department has already begun contacting businesses selected for the first application deadline of May 25, 2022. Businesses with fewer than 100 employees do not need to register. If a business with fewer than 100 employees receives a notice from the IDOL to apply for an equal pay registration certificate, the employer must certify in writing that it is exempt from the requirement in order for its compliance to be excused. A business that subsequently reaches or surpasses 100 employees must submit its contact information to the IDOL by January 1 of the following year, and the IDOL will assign the business an application deadline.
Keep in mind that the IDOL’s failure to notify an employer about its certification deadlines does not excuse an employer from compliance. Therefore, employers should make sure they obtain a submission deadline from the IDOL.
Demographic Data and Wage Records
When applying or recertifying for an equal pay certificate, covered employers must submit a list of all employees from the prior calendar year, organized by gender, race, and ethnicity, and the total wages paid to each employee to the nearest $100. The records must also include each employee’s job classification or title, the county in which the employee works, the employee’s start date of employment, and any other information the IDOL deems necessary to determine whether pay equity exists in the business.
Compliance Statement
When applying or recertifying for an equal pay certificate, employers must certify their compliance with the IEPA, Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act, and “other relevant laws.” While it is unclear what constitutes “other relevant laws,” the IDOL may publish guidance to clarify this ambiguity in the coming months.
The compliance statement must also certify that:
- The employer provides average compensation to its female and minority employees at a rate “not consistently below” average compensation (as determined by the U.S. Department of Labor) for male and non-minority employees within each of the major EEO-1 job categories;
- The employer does not restrict job opportunities to one sex, and makes promotion and retention decisions without regard to sex; and
- The employer corrects wage and benefit disparities when identified to ensure legal compliance.
The employer must also include its approach to and frequency with which it evaluates wages and benefits. An organization’s corporate officer, legal counsel, or authorized agent must sign the compliance statement.
EEO-1 Report
When applying or recertifying for an equal pay certificate, covered employers must submit a copy of their most recently filed EEO-1 report to the IDOL.
Access to Application Information, Penalty Provisions, and Grace Period
The aggregate data that employers submit with their application will not remain confidential, as the Illinois Secretary of State will publish such information. Businesses with multiple facilities in Illinois should submit a single application and one application fee of $150. The amendments allow a 30-day grace period to correct a failure to file an application or to cure deficiencies, as well as the opportunity to appeal rejected applications. Employers that violate the IEPA’s reporting and certification requirements could face civil penalties of up to $10,000.
Recommendations for Employers
Employers in Illinois should begin preparing for these new reporting and certification requirements by collecting relevant employee data. As always, Much’s Labor & Employment attorneys are available to help you navigate these upcoming changes.