Illinois: Equal Pay Certificate Requirements Amended

APPLIES TO

Employers with IL Employees who file EEO-1 Reports

EFFECTIVE

June 25, 2021

QUESTIONS?

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Earlier this year, Illinois passed SB 1480, a bill that amended the Illinois Equal Pay Act to require employers who currently file federal EEO-1 reports to also submit similar pay and demographic information to the state. Employers of 100 or more employees are required to obtain a pay registration certificate from the Illinois Department of Labor, with reporting to take place every two years.

As of June 25, 2021, SB 1847 further amends the Illinois Equal Pay Act with several important changes:

Shortened compliance timeline. Employers are now required to submit the equal pay certification application between March 24, 2022 and March 23, 2024.
Employee demographic information. In addition to demographic data typically included on EEO-1 reports, employers must also include: the county in which the employee works, the date the employee began working for the business, and “any other information the Department deems necessary to determine if pay equity exists among employees.”
Wage comparison factors. As part of the equal pay certification application, employers must certify that the average compensation for female and minority employees is not consistently below such compensation for male and non-minority employees, taking into account various wage comparison factors, such as specific job requirements, experience, skill, effort, etc. The list of wage comparison factors has been expanded to include education or training, job location, and use of a collective bargaining agreement.
Setting compensation. Under SB 1480, employers are required to indicate one of a few specific approaches used to set compensation and benefit rates, such as a market pricing approach, performance pay system, internal analysis, or more.
Data protection. Any individually identifiable information submitted within or related to an equal pay certification application is considered confidential information and not subject to disclosure under the Illinois Freedom of Information Act.
Penalties and fines. Employers who fail to comply with the Equal Pay Act certification requirements may be subject to a penalty of up to $10,000, revised from a prior provision that subject employer to a penalty of up to 1% of the business’s gross profits for various violations. The amendments also increase civil fines for violating the Act.
Procedure to appeal. The amendments add a statutory period of 30 days for employers to cure any deficiencies in their equal pay certification application that result in the application’s rejection. Further, employers may request an administrative hearing prior to any civil penalties being imposed.

Action Items

Have a pay equity audit performed for compliance.
Be prepared to apply for equal pay certification as early as March 24, 2022.
Begin tracking required data for the new state reporting requirement.
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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.