Illinois Amends Human Rights Act, Business Corporation Act, and Equal Pay Act

Stokes Wagner
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On March 23, 2021, Governor J.B. Pritzker signed SB 1480 into law, amending three state statutes. First, the Illinois Human Rights Act is amended to impose employer obligations when making employment decisions based on criminal convictions. Second, the Illinois Business Corporation Act is amended to require EEO-1 reporting to the state. Third, the Illinois Equal Pay Act is amended to require employers to obtain an “Equal Pay Registration Certificate” by March 24, 2024.

Criminal Convictions and Employment Decisions The amendment to the Illinois Human Rights Act Amendment creates new obligations for employers when using criminal convictions as a basis for employment decisions. The amendment generally prohibits an employer from using a conviction record in employment actions. “Conviction record” means information that a person has been convicted of a felony, misdemeanor, or other criminal offense, placed on probation, fined, imprisoned, or paroled pursuant to any law enforcement or military authority.

However, an employer may use a conviction record to make an employment decision if it falls within one of two exceptions:

  1. There is a substantial relationship between the previous criminal offense and the employment sought; or
  2. The granting or continuation of employment would involve an unreasonable risk to property or the general safety or welfare of specific individuals or the general public.

To fall under the substantial relationship exception, the employer must consider whether the employment position sought offers the opportunity for the same or a similar offense to occur and whether the circumstances leading to the conduct for which the person was convicted will recur in the employment position. Furthermore, employers must consider the following factors prior to making a determination: (1) the length of time since the conviction, (2) the number of convictions that appear on the conviction record, (3) the nature and severity of the conviction and its relationship to the safety and security of others, (4) the facts or circumstances surrounding the conviction, (5) the age of the employee at the time of the conviction, and (6) evidence of rehabilitation efforts.

If, after considering the factors above, the employer makes the preliminary decision to take adverse action against the employee, the employer must provide written notice of its decision to the employee. The notice must include:

  1. Notice the conviction that is the basis for the preliminary 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 to the notice of the employer’s preliminary decision before that decision becomes final. The explanation must inform the employee that they may submit evidence challenging the accuracy of the conviction record or evidence in mitigation, such as rehabilitation.

The employee shall have at least 5 business days to respond to the notice. Any information submitted by the employee must be considered by the employer prior to making the final decision. If the employer ultimately makes the final decision to disqualify or take adverse action solely or in part because of the employee’s conviction record, the employer shall provide written notice of the following:

  1. Notice of the conviction that is the basis for the final decision and the employer’s reasoning;
  2. Any existing procedure the employer has for the employee to challenge the decision or request reconsideration; and
  3. The right to file a charge with the Department.

EEO-1 Reports to the Illinois Secretary of State The Business Corporation Act amendment requires any domestic or registered foreign corporations that file an EEO-1 report to provide information that is substantially similar to the employment data reported under Section D of the corporation’s EEO-1. The format in which the information is submitted must be approved by the Secretary of State. The Secretary of State will publish the data on gender, race, and ethnicity of each corporation’s employees on its official website within 90 days of receipt.

This information must be included in the corporation’s annual report filed on and after January 1, 2023.

Equal Pay Registration Certificate Requirements The amendment to the Equal Pay Act imposes an obligation on private employers with more than 100 employees in the State of Illinois to obtain an “Equal Pay Registration Certificate” (“Certificate”) from the Department or certify in writing that it is exempt by March 24, 2024, and must recertify every 2 years thereafter. Any new business must obtain the Certificate within 3 years of commencing business operations.

To apply for a Certificate, the employer must pay a $150.00 filing fee, submit a list of the gender, race, ethnicity of each employee, and report each employee’s total wages. Furthermore, any business that is required to file an EEO-1 report with the EEOC must also submit a copy of the business’s most recently filed EEO-1 report for each county in which it has employees. Lastly, the employer must submit an equal pay compliance statement signed by a corporate officer, legal counsel, or authorized agent of the business stating:

  1. That the business complies with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act, and the Equal Pay Act of 2003;
  2. That the average compensation for its female and minority employees is not consistently below the average compensation for its male and non-minority employees within each of the major job categories in the EEO-1 report for which the employee is expected to perform work, taking into account factors such as length of service, requirements of a specific job, experience, skill, effort, responsibility, working conditions of the job, or other mitigating factors;
  3. That the business does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex;
  4. That wage and benefit disparities are corrected when identified; and
  5. How often wages and benefits are evaluated.

In addition, the equal pay compliance statement must indicate what method an employer utilizes when setting compensation and benefit; a market pricing approach, state prevailing wage or union contract requirements, a performance pay system, an internal analysis, or an alternative approach. Businesses with multiple locations in Illinois must submit a single application regarding all of their operations.

Within 45 days of receipt of the application, the Department of Labor may issue or reject the certification. An application may be rejected if it does not comply with all the requirements above. Once issued, a Certificate may be suspended or revoked for failing to make a good faith effort to comply or failure to comply with federal and state non-discrimination and equal pay statutes. The Department may also audit the employer’s compliance with this amendment. A civil penalty of 1% of the business’s gross profits may be imposed on businesses that fail to obtain a Certificate or have their Certificate suspended or revoked.

Furthermore, the amendment provides whistleblower protection to employees who disclose or threaten to disclose the employer’s unlawful practices, testifies before a public body, or assists or participates in a proceeding to enforce the provisions of the Equal Pay Act.

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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