New Amendments to the Illinois Equal Pay Act Increase Compliance Issues for Large Employers

On June 25, 2021, just three months after Illinois enacted sweeping amendments to the Illinois Equal Pay Act of 2003 (“IEPA”), turning it into one of the most impactful state equal pay laws in the country, Illinois Governor Pritzker signed into law new amendments to the IEPA that are effective immediately. The new amendments expand reporting requirements and potentially accelerate the date for applying for an “equal pay registration certification” by as much as two years. For covered employers in Illinois, the new amendments clarify some ambiguities in the prior amendments and eliminate the controversial penalty of 1% of a company’s gross profits for failure to comply with the new registration certification requirements.

The New (June 2021) Amendments to the Illinois Equal Pay Act

Deadlines: Existing covered businesses with 100 or more employees in operation in Illinois must apply online to the Illinois Department of Labor (IDOL) for an Equal Pay Registration Certificate (EPRC) between March 24, 2022, and March 23, 2024. Qualifying businesses that begin operation after March 23, 2021, must apply for an EPRC within three years, but not before Jan. 1, 2024. All businesses must recertify every two years.  The June 2021 amendments contain a 30-day grace period to correct an inadvertent failure to file an application or to cure deficiencies in an application for a certificate.

The certification deadline will be set by the IDOL although it is unclear how the IDOL will determine the deadline for each business. The IDOL will first “collect contact information” from covered businesses and will then assign a deadline by which the business must apply for its certification.

Data to be Submitted: Equal pay information to be collected by IDOL now includes:

• A copy of the EEO-1 report filed with the EEOC. The definition of “business was clarified to mean; (1) any private employer with more than 100 employees in Illinois and (2) who is required to file an EE0-1 report, but the new amendments did not clarify whether a covered business may have to submit a consolidated report that includes employees outside of Illinois.”
• A list of all employees during the past calendar year, separated by gender, race, and ethnicity;
• The total wages paid to each employee during the last calendar year to the nearest $100;
• The county in which the employee works;
• The employee’s start date; and
• Any additional information deemed necessary to determine if pay equity exists

Under the new June 2021 amendments, covered businesses must also submit an equal pay compliance statement signed by an authorized agent of the business.  Employers must now certify compliance with Title VII, the federal Equal Pay Act, the Illinois Equal Pay Act, the Illinois Human Rights Act, and the Equal Wage Act, as well as “other relevant laws” that are as yet undefined.

Changes to Penalties and Protections: Among other penalties for noncompliance with the registration certificate requirement contained in the March 2021 amendments, the IDOL was required to issue a civil penalty equal to 1% of the corporation’s “gross profits,” which was not defined, but has been removed in any event by the most recent amendments to the IEPA. The June 2021 amendments now provide that a covered business may be subject to a penalty of $10,000 per violation. The June 2021 amendments also deleted the “whistleblower protection” provisions contained in the earlier amendments.

The Illinois Department of Labor will provide additional guidance regarding the application process.

Prior (March 2021) Amendments to the Illinois Equal Pay Act

As previously reported here, three months ago, on March 23, 2021, the Illinois Equal Pay Act, 82 ILCS Sec. 112/1 et seq., was amended to require private employers with more than 100 employees in Illinois to obtain an “equal pay registration certificate” from the IDOL by filing an application with some extensive disclosures and certification, plus covered employers were required to recertify every two years thereafter.

In order to obtain an “equal pay registration certificate,” covered employees had to pay a small fee and submit a compliance statement certifying, among other things, that the business:

• Was in compliance with various federal and state employment and equal pay laws;
• Did not restrict job opportunities for one sex; and
• Made employment decisions without regard to sex.

The March 2021 amendments also required certification that the company provides average compensation to female and minority employees at a rate “not consistently below” average compensation for male and non-minority employees within relevant EEO-1 Report major job categories. A company was also required to correct wage and benefit disparities when identified.  The new June 2021 amendments add the following factors to the non-exhaustive list of factors to assess when making the certification, adding “education or training, job location [and] use of a collective bargaining agreement,” along with factors listed in the March 2021 amendments, which included “length of service, requirements of specific jobs, experience, skill, effort, responsibility, working conditions on the job, or other mitigating factors.”

The certification requirement also required several extra demographic and pay-data disclosures. The Illinois Business Corporation Act was amended to require covered domestic and foreign corporations that file EEO-1 Reports to file with their annual corporate report to the Illinois Secretary of State “substantially similar” workplace demographic information, which data on the gender, race, and ethnicity of each corporation’s employees would be published on the Secretary of State’s website within 90 days thereafter.