Amendments to Illinois Law Make Using Criminal Convictions in Employment Decisions a Civil Rights Violation, Outlines New Equal Pay Reporting Requirements

Hinshaw & Culbertson - Employment Law Observer

Hinshaw & Culbertson - Employment Law Observer

Illinois Governor J.B. Pritzker signed SB 1480 into law on March 23, 2021. Effective immediately, the law significantly amends the Illinois Human Rights Act (IHRA), Illinois Equal Pay Act (IEPA), and the Illinois Business Corporation Act. The amendments affect employers' ability to use criminal conviction records in employment decisions and imposes new reporting requirements regarding pay equity.

Conviction records under the Illinois Human Rights Act

The newly amended IHRA prohibits employers—including employment agencies or labor organizations—from using a conviction record as a basis for refusing to hire, segregate, or act on recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or terms, and privileges or conditions of employment unless there is a "substantial relationship" between one or more of the criminal offenses and the position sought or held. In fact, according to the amendment, using a conviction in any of these ways is considered a civil rights violation.

Under the IHRA, a "substantial relationship" places an onerous burden on employers by requiring them to undertake "a consideration of whether the employment position offers the opportunity for the same or similar offense to occur and whether the circumstances leading to the conduct for which the person was convicted will recur in the employment position." In addition to the substantial relationship test, another basis for relying on a conviction record as a disqualifying factor is the matter of whether employing an applicant or employee would involve an unreasonable risk to property or the safety or welfare of specific individuals or the general public.

Employers must engage in an interactive assessment with the applicant or employee regarding the conviction and potential employment action. The employer must first consider "mitigating factors," including the length of time since the conviction, the number of convictions, the nature and severity of the conviction, the employee's age at the time of the conviction, and evidence of rehabilitation.

If, after considering those factors, the employer makes the preliminary decision that the employee's conviction record disqualifies the employee, they must notify the employee of the decision in writing. The notice must include the specific information outlined in the IHRA, including notice of the disqualifying conviction, a copy of the conviction history report (if any), and an explanation of the employee's right to respond to the employer's notice. The employee has five business days to respond to the notice before the employer makes a final decision. Should the employer decide to disqualify or take adverse action "solely or in part" of the conviction, the employer must notify the employee in writing of the disqualifying convictions that are the basis for their final decision. The notification should also provide the employer's reasoning for the disqualification, describe any existing procedure by which the employee may challenge the decision, and inform the applicant or employee of the right to file a charge with the IDHR.

Employers should carefully review these provision's requirements when considering conviction records concerning any employment action.

Pay Equity reporting under the Illinois Equal Pay Act

The law also amends the IEPA. Accordingly, employers with more than 100 employees in Illinois are now required to obtain an "equal pay registration certificate." Employers covered by the provision must obtain the certificate within three years of the effective date of the amended IEPA, March 23, 2024, and must re-certify every two years.

To apply for the equal pay registration certificate, employers must pay a filing fee, submit their EEO-1 report to the Department of Labor (DOL), and compile a list of all employees during the past calendar year. The list should be separated by gender, race, and ethnicity, and report the total wages paid to each employee for that year. In addition, employers must provide a statement signed by an officer, agent, or legal counsel verifying that the employer complies with state and federal equal pay laws. The employer must also provide information that includes their methods for setting compensation and affirm that any identified wage disparities are corrected to ensure compliance with equal pay laws.

If an employer does not comply with this section or with the equal pay laws it identifies, the DOL may suspend or revoke the employer's registration certificate and may interview workers, take depositions and issue subpoenas for records to investigate the potential revocation or suspension. The DOL also has the authority to audit an employer's compliance with this section by requesting information, including average annualized salaries to male and female employees. If an employer does not obtain an equal pay registration certification under this provision or the certification is suspended or revoked, the DOL will impose a civil penalty in an amount equal to 1% of the business's gross profits.

The stringent reporting requirements created by this amendment set it apart from equal pay laws nationwide. Employers covered by this provision need to be prepared to submit the required information to obtain the equal pay registration certificate by the March 2024 deadline.

The Business Corporation Act

Finally, beginning on January 1, 2023, employers who are required to submit EEO-1 reports with the EEOC must submit information that is substantially similar to the employment data reported under Section D of the EEO-1 report in their annual report to the State of Illinois. The Secretary of State will then publish the data on the gender, race, and ethnicity of the employer's employees on the Secretary of State website.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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