To comply with the latest iteration of the Illinois Equal Pay Act (IEPA), employers with at least 100 employees in the state of Illinois are required to submit an application to obtain an equal pay registration certificate from the Illinois Department of Labor (IDOL) between March 24, 2022, and March 23, 2024. The IDOL will assign each business an application date within that period. (This reporting and compliance requirement appears in SB 1847, legislation that Governor J.B. Pritzker signed into law on June 25, 2021, to further amend the IEPA (which was previously amended in March 2021).)
It is unclear how IDOL will assign these dates, but when an employer receives its notice, it will have no less than 120 days to comply. Previously, the IEPA granted employers a three-year “ramp up” period to comply with the statute, requiring employers to submit their applications no later than March 24, 2024. The June 2021 amendments clarify that the IDOL’s failure to assign a submission deadline does not absolve the employer from the IEPA’s reporting requirements, though it “may be a mitigating factor when making a determination of the violation.”
Equal Pay Registration Certificate: Final Requirements
To obtain a certificate of compliance, employers must submit the following materials with their application:
- A list of employees with the following information for each employee:
- Total wages paid during previous calendar year,
- County in which the employee works,
- Date employee started working for the business, and
- Any other information the IDOL deems necessary to determine if pay equity exists among employees.
- A statement signed by an officer or agent of the business affirming that:
- the business is in compliance with the IEPA, Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, and the Equal Wage Act;
- the average compensation for the business’s female and minority employees is not consistently below the average compensation for its male and non-minority employees within major job categories when accounting for various factors, such as length of service, requirements of specific jobs, experience, skill, effort, responsibility, working conditions of the job, education or training, job location, use of collective bargaining agreement, or other mitigating factors;
- the business does not restrict certain genders to specific roles and makes employment decisions without regard to sex; and
- wage and benefit disparities are corrected by the business when identified.
- A copy of the company’s most recent EEO-1 report.
- A description of the “approach the business takes in determining what level of wages and benefits to pay its employees,” which may include, but is not limited to, “a wage and salary survey.” Previously, the IEPA required employers to identify a specific system from the following options: market-based, prevailing wage/union contract, performance pay, internal analysis, or another alternative. The June 2021 amendments grant employers greater flexibility in choosing a method by which to determine salaries and to explain any potential difference in pay.
All applications require a $150 filing fee.
The June 2021 amendments provide a 30-day grace period to correct an inadvertent failure to file an application for an equal pay registration certificate or address deficiencies in an application. Employers are required to recertify every two years after initial certification, at a date determined by the IDOL.
Compliance violations are now assessed with a fine of up to $10,000. While it is unclear whether this is a one-time penalty or assessed per violation, it signifies a significant reduction from the original March 2021 penalty provision that could assess penalties based on a percentage of company gross profits.
What Illinois Employers Should Do Now
- If you are a covered business, you should register with IDOL by providing the contact information of key personnel members to ensure that future communications and notices will be received. IDOL is requesting the names and email addresses of three key business personnel from every covered business.
- Start reviewing compensation practices with an eye on the IEPA requirements. Beginning an analysis now will permit ample time to correct any problems before the application for the equal pay registration certificate must be filed.
- Discuss with counsel whether conducting a formal EEO audit and a pay equity analysis is warranted and the potential legal risks involved in such an endeavor.
- Prior to embarking on any audit, make sure your company is prepared to rectify any problems uncovered by the review that could lead to the denial of a certificate of compliance or other legal consequences.
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