Illinois Employers Face New Requirements for EEO Compliance, Equal Pay, and Criminal Records

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Employers have a barrage of new regulations with which to comply under the Illinois Business Corporation Act (IBCA), the Illinois Equal Pay Act (IEPA), and new amendments ­to the Illinois Human Rights Act (IHRA), signed by Governor Pritzker into law on March 24, 2021.

EEO Reporting

The IBCA now requires corporations that must file an Employer Information Report EEO-1 with the EEOC (generally, private employers with 100 plus employees and federal contractors with 50 plus employees) to file a report with the Illinois Secretary of State (SOS) that contains data about the race, gender, and ethnicity of its employees. The data is substantially similar to that collected under Section D of the EEO-1. The SOS will publish the data on its website. This report must be included with the corporation’s annual report beginning on January 1, 2023.

Equal Pay Registration

The IEPA mandates that private employers with more than 100 employees obtain an Equal Pay Registration starting on March 24, 2024, and recertify every 2 years. The Equal Pay Registration requires a $150 filing fee and submission of an Equal Pay Compliance Statement. Covered employers must submit the most recent EEO-1 and a record of the race, gender, ethnicity, and wages paid to all employees during the previous calendar year.

The Equal Pay Compliance Statement requires certification of the following:

  1. The business is in compliance with Title VII, the federal EPA, the Equal Wage Act, and the IEPA.
  1. The average compensation for female and minority employees is not consistently below the average compensation for male and non-minority employees, considering length of service, job requirements, skill, effort, responsibility, working conditions and other mitigating factors.
  1. Employees are not restricted by sex to certain jobs, and promotion and retention decisions are made without regard to sex.
  1. Wage and benefit disparities are corrected when identified to ensure compliance.
  1. How often wages and benefits are audited to ensure compliance.

The Equal Pay Compliance Statement also dictates that employers identify how the business sets compensation and benefits, i.e., by a market pricing approach, state prevailing wage or union contract requirements, performance, internal analysis, etc.

Receiving a registration certificate does not establish actual compliance and the Department may revoke a certificate. The IEPA amendment authorizes the Director to investigate businesses, including issuing subpoenas, for compliance with the Act, and to impose civil penalties equal to one percent (1%) of the gross profits. Businesses may request administrative review of suspension or revocation of its registration certificate.

The Amendment protects whistleblowers from retaliation for disclosing violations of the law or participating in investigations. Remedies for whistleblowers include reinstatement, two times back pay with interest, reinstatement of full fringe benefits and seniority rights, and reasonable attorney's fees and costs.

Conviction History

The IHRA now protects persons with conviction histories from being discriminated against on the basis of their conviction record in employment matters. Employers may consider conviction histories when there is a “substantial relationship” between the criminal offense and the employment sought or held, or there is an unreasonable risk to property, safety, or welfare. The law sets out factors that an employer may consider in determining whether there is a substantial relationship: length of time since the conviction, the number of convictions, their nature and severity in terms of safety and security to others, the age of employee at the time, the context, and evidence of rehabilitation. The law took immediate effect upon passage in late March.

The law requires an employer to engage in an “interactive assessment” of the conviction record by considering any mitigating factors, notifying the employee in writing of a preliminary decision, considering any employee feedback, and notifying the employee in writing of the final decision.

The written notification of the preliminary decision must include: (1) the conviction(s) that is the basis for the decision and the employer’s reasoning, (2) a copy of the conviction history report if any, and (3) an explanation of the employee’s right to respond within five business days with mitigating evidence or evidence challenging the accuracy of the conviction.

An employer must consider the employee’s response before making a final decision. Once the final decision is made, the employer must provide written notice again identifying the disqualifying conviction, an appeal procedure, and the employee’s right to file a charge with the Illinois Department of Human Rights.