In 2021, the Illinois Equal Pay Act and the Illinois Business Corporation Act were amended to impose new compliance obligations on employers operating within the state. With the first of these obligations—requiring employers to apply for an equal pay registration certificate—recently becoming effective, and the second—requiring disclosure of workplace demographic and pay information—looming, now is a good time for Illinois employers to review and, if necessary, adapt their practices to comply with these changes in the law.
Equal Pay Registration Certificate Requirement
SB 1480 and SB 1847 amended the Illinois Equal Pay Act to require certain private employers to obtain equal pay registration certificates from the Illinois Department of Labor (“DOL”). Employers that are subject to this requirement (detailed below) and transacting business in Illinois must apply for an equal pay registration certificate between March 24, 2022 and March 23, 2024, and must recertify every two years thereafter. The DOL will assign each impacted employer a deadline to submit their application within the initial two-year window. While it is unclear how application deadlines will be assigned, the DOL will provide employers with at least 120 days’ advanced notice of their respective deadlines.
Here are the basics that Illinois employers need to know:
The DOL has published FAQs regarding the application process as well as a Compliance Statement template. The Compliance Statement template sheds some light on how employers are expected to determine employee compensation and benefits by listing various methods of performing that calculation. However, ideally, further guidance will be published shedding light on how employers are expected to determine whether the average compensation for its female and minority employees is consistently below the average compensation for its male and non-minority employees.
Workplace Demographic and Pay Disclosure Obligation
SB 1480 also amended the Illinois Business Corporation Act to require certain corporations to disclose workplace demographic information as part of their annual reports starting on January 1, 2023. Corporations are subject to this requirement if they are obligated to file an Employer Information Report EEO-1 with the Equal Employment Opportunity Commission. Impacted corporations will be required to include information that is substantially similar to the employment data reported under Section D of their EEO-1—in a format approved the Illinois Secretary of State—as part of their annual reports.
The Illinois Secretary of State will publish data on the gender, race, and ethnicity of each reporting corporation’s employees on its website.
Practical Impact
Illinois employers should assess their readiness to comply with the above-detailed requirements and determine what measures they must implement to comply with these new requirements.