On August 11, 2023, Illinois Governor J.B. Pritzker sanctioned a bill introducing changes to the Illinois Equal Pay Act (IEPA), instituting pay transparency stipulations for the majority of employers in Illinois. The legislation will come into force on January 1, 2025, and, in combination with recent modifications to the IEPA, will reshape employer practices within the state.
Principal Provisions of the New Legislation
1. Pay Transparency Mandates:*Employers with a workforce of 15 or more are now required to display the pay scale and benefits associated with a job vacancy in their Illinois advertisements. Distinctively, compared to other states, employers can adhere to this requirement by providing a link directing to a page that details the relevant pay and benefits information.
2. Definition of Pay Scale: The term encompasses the wage or its range, along with a descriptive overview of benefits and compensation components such as bonuses, stock options, and other incentives anticipated for the role. Factors like previously established pay scales, the remuneration range of current employees in similar roles, or the budget allocation for the role should guide employers in this determination.
3. Inclusion of Remote Roles: The law is applicable not just to roles rooted in Illinois but also positions that either partly take place in the state or are located outside, but are overseen by an Illinois-based supervisor or office.
4. Promotion Announcements: Should an external job advertisement be pertinent to internal employees as a promotional opportunity, the employer must notify existing employees within 14 days of the external job posting.
5. Obligations for Third-Party Advertisements: Employers liaising with third parties for job announcements must supply them with the requisite pay scale and benefits data (or the respective link). The third party will bear responsibility for any omissions, barring cases where the employer didn’t provide the necessary information.
6. Complaint Procedure: Aggrieved individuals, whether current or former employees, have the prerogative to file complaints with the Illinois Department of Labor regarding violations of these new provisions. Such complaints should be lodged within a year of the alleged violation.
7. Penalties and Consequences: Upon receiving a complaint or of its own accord, the Department can investigate potential breaches. Substantiated violations could lead to fines ranging from $500 (first instance) to $10,000 (third and subsequent instances). Notably, employers will be granted a grace period to address initial and secondary offenses but will face automatic penalties for subsequent infractions over a five-year window.
8. Documentation Mandate: Employers must retain records detailing the pay scale, benefits, and the job advertisement for every position.
9. Implications for Permanent Residency Applications: Firms aiming to procure a permanent labor certification from the U.S. Department of Labor to employ a non-U.S. citizen on a permanent basis should note Illinois’ transparency requirements, mirroring those of other states.
Given the substantial revisions to the IEPA in areas of pay equity and transparency recently, it’s predicted that this trajectory will persist. It is advisable for Illinois-based employers to liaise with legal specialists to ensure adherence to these emerging norms.
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