New Amendments to Illinois Laws Impact Illinois Employers

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Newly enacted Illinois laws immediately prohibit employers from using criminal convictions in hiring except in specific situations. Beginning in 2023, the new laws also will require large employers to submit EEO-1 data with their corporate annual reports, and in 2024 will require them to file wage disclosures and compliance certificates with the Illinois Department of Labor. Some of the broadest protections for whistleblowers in the country became effective March 23.

Restrictions on Employer’s Use of Criminal Convictions

The Illinois Human Rights Act (IHRA) was amended, effective immediately, to bolster prior “Ban the Box” laws by prohibiting the use of criminal convictions by Illinois employers except in special circumstances and only if special notices (similar to those required by the federal Fair Credit Reporting Act) are provided to applicants and employees.

Illinois employers are now prohibited from using criminal convictions for employment purposes unless:

  • There is a “substantial relationship” between one or more of the prior criminal offenses and the employment; or
  • New or continuing employment would involve an unreasonable risk to property or the safety of specific individuals or the general public.

Illinois employers must now provide the following notices to employees and applicants and engage in an “interactive assessment” before a criminal conviction can be used to preclude employment:

  • Preliminary Notice
    • ​A notice must be provided that the employer has made a preliminary decision that the conviction record disqualifies the employee. The preliminary notice must state, in writing, the basis for the preliminary decision, provide a copy of the conviction record, and explain the employee’s right to respond to the notice;
  • “Interactive Assessment”
    • The employee must be allowed at least 5 business days to respond and the employer must consider the employee’s response.
  • Final Notice 
    • If the employer makes a final decision to take adverse action based on the conviction record, the employer must provide a written final notice stating: (a) the disqualifying conviction, (b) the employer’s reasoning for the decision, (c) any procedure to challenge the decision or request reconsideration, and (d) the right to file a charge with the Illinois Department of Human Rights.

The new notice requirements under the amended IHRA are in addition to the notice and disclosure requirements of the Fair Credit Reporting Act.

EEO-1 Data Required with Illinois Corporate Annual Reports

Effective for Illinois corporate annual reports filed on or after Jan. 1, 2023, the Illinois Business Corporation Act was amended so that a corporation organized under Illinois law that is required to file an EEO-1 report must also file “substantially similar” data when it files its Illinois annual report.  The Illinois Secretary of State will then publish on its website each corporation’s employee gender, race, and ethnicity data. 

Currently, EEO-1 reports with information about employees’ job categories, gender, race, and ethnicity must be filed with the EEOC/DOL by employers with at least 100 employees.

Equal Pay Certification

By March 24, 2024, amendments to the Illinois Equal Pay Act (IEPA) will require employees with more than 100 employees to obtain an “equal pay registration certificate” from the Illinois Department of Labor by filing disclosures regarding employee wages and compliance certifications.

The “equal pay registration certification” will require covered employers to certify, among other things, that:

  • The business complies with Title VII, the federal Equal Pay Act, the IHRA, the Equal Wage Act, and the IEPA;
  • 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 major job category in its EEO-1 report;
  • Employees of one sex are not restricted to certain job classifications and make retention and promotion decisions without regard to sex;  
  • How often wages and benefits are evaluated to ensure compliance with the above laws; and
  • The employer must set forth the method it uses to set compensation and benefits.

If a corporation does not comply or its certificate is suspended or revoked, the Equal Pay Act amendments provide for a civil penalty of one percent of the business’s gross profits. 

Broad new whistleblower anti-retaliation protections went into effect on March 23.

Under the amendments to the Illinois Equal Pay Act, an Illinois business is now prohibited from taking retaliatory action against an employee who:

  • Discloses or threatens to disclose any activity, inaction, policy, or practice  that the employee reasonably believes is in violation of a law, rule, or regulation;
  • Provides information to or testifies before any public body investigating a violation of law by a nursing home administrator; or
  • Assists or participates in a proceeding to enforce the IEPA.

The new anti-retaliation protections are not limited to complaints about unequal pay and include a new private cause of action for whistleblowers.

Conclusion

Illinois employers will now need to assess how best to comply with the new amendments to the IHRA, the Illinois Business Corporation Act, and the Illinois Equal Pay Act. New policies, management training, and procedures to obtain “equal pay registration certificates” should be considered.

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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