Illinois Employers Must Start Reporting Pay Data

Illinois Employers Must Start Reporting Pay Data

The saying “what gets measured gets improved” is right on the money when it comes to pay data reporting. As of January 1, 2023, amendments to the Illinois Equal Pay Act will now require many Illinois employers to report employee-level pay data to the state’s Department of Labor (IDOL), and will permit employees to see pay data from their companies when requested. The updated law will also eventually require companies to certify that they are not consistently under-paying female and minority employees.

Information on compensation has traditionally been difficult to find, if it could be obtained at all. These new requirements have the potential to significantly change that narrative in Illinois. Now employees will have a better sense of where they stand in relation to their colleagues, and businesses will be nudged to be more equitable.

Illinois Makes History in Anti-Discrimination Legislation

When SB 1480 passed in March 2021, Illinois became the first state to require employee-level pay data reporting rather than aggregate workforce data. This means that, for example, anonymized data for each individual employee within a calendar year must be reported—including each employee’s title, race, gender, ethnicity, and salary—as opposed to average salaries for everyone with the same title.

The state also required that certain employers receive an Equal Pay Registration Certificate verifying compliance with federal and state anti-discrimination laws, including Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Right Act, the Equal Wage Act, and the Equal Pay Act of 2003.

What Does This Mean for Illinois Employers?

Illinois employers must comply with a variety of new regulations. The first round will take effect in the new year. The second round will occur in March 2024. Below is a brief guide to employers’ obligations under the new law.

January 2023: Reporting and publishing equal pay data begins.

  • Who must report: private employers of over 100 people.

  • What must be reported:

    • List of all employees in the past year separated by gender and race per the employer’s most recent EEO-1 report, which is a required annual workforce demographic report for private employers and federal contractors with a certain number of employees; and

    • Total wages as defined by the IWPCA paid to each employee in the past year.

  • Filing fee: $150

  • Where and how to report: employers must report to the Illinois Department of Labor via their portal after creating an account.

  • How often to report: annually.

  • Where data will be available: IDOL will provide data in response to individual employee requests about their employers.

March 2024: Equal Pay Registration Certificate requirement takes effect.

  • Who must obtain certification: private employers of over 100 people.

  • How often: employers must recertify every two years.

  • What needs to be verified in order to achieve certification:

    • That female and minority employees are not paid consistently below average compensation for male and non-minority employees;

    • That job classifications are not governed or restricted by sex;

    • That wage disparities are corrected once identified;

    • The frequency of wage and benefit evaluations to ensure compliance; and,

    • The business’ standard for determining compensation (e.g., market pricing, state prevailing wage, union contract, performance pay system).

  • How to get started: create an account on the Illinois Department of Labor website. There are templates and training resources on this page to help you ensure you’ve gathered all the data you need before submitting. Once your account is created, you can access the Equal Pay Registration Certificate portal.

What Data Will Be Publicly Available?

The IDOL will not make public any personally identifiable information on its website, although it may publish aggregate data about employers. For instance, job categories and average wages may be supplied and broken down by race, gender, and other markers. Such data may be shared with other state agencies, such as the Illinois Department of Human Rights and the Office of the Attorney General.

It is less clear how personally identifiable information will be maintained as confidential when employees request data concerning their employer. Workers will be able to ask for pay information that correlates to certain job titles. If only one or two people hold that title, the information is practically rendered non-confidential. We may simply have to wait for additional guidance from the IDOL on how exactly it will release certain information.

Rights of Employees

As noted previously, employees have the right to request and are entitled to receive anonymized pay data from their employers about pay for employees in their classification or with their title. For employees who are used to being discouraged from discussing their salaries with coworkers, this is a significant culture shift from one of intimidation to empowerment and self-advocacy. Normalizing open conversations around equity in compensation ultimately will benefit both employers and employees by reducing time and energy spent on speculation and distrust.

Illinois’ recent pay data reporting legislation might seem onerous for employers, but in the long run, it will help them avoid costly pay discrimination litigation. It also will help ensure that they are offering competitive salaries in a labor market where talented employees can be choosier than ever due to the increasing availability of remote work opportunities that free employees from geographical limitations. And it will create a healthier culture for employees, allowing them to focus on their work rather than worrying that they’re getting shorted.

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