Greensfelder, Hemker & Gale
United States: Illinois Employers May Be Subject to New Equal Pay Act Reporting and Certification Obligations
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Strong pressure continues for states to pass tougher pay equity laws and enforce efforts to address pay inequality for certain protected classes, including women and people of color. Many states, including Illinois, have prioritized pay equity by passing laws aimed at reducing the wage gap.
The Illinois Equal Pay Act (“IEPA”) was amended in 2021 to require certain private companies to obtain an Illinois Equal Pay Registration Certificate and both recertify years thereafter. Covered businesses are those with 100 or more employees in Illinois and are required to file an EEO-1 report with the Equal Employment Opportunity Commission. It is important to note that the Illinois Department of Labor (“IDOL”) has ordered that employees who work remotely in states outside of Illinois but report directly to an employer’s establishment in Illinois, are considered in determining whether an employer meets the 100 or more employee threshold. that would make it a covered business.
IDOL sets early application deadlines
On January 24, 2022, IDOL announced that it would contact covered companies directly when it was time for them to apply for the certificate. According to IDOL, each covered company will receive at least 120 days’ notice of its expiry. The first group of companies covered in Illinois were informed that their application deadline was May 25, 2022. The second group were then informed that their deadline was June 22, 2022. Because IDOL randomly selects covered businesses to which it sends notices, some may not receive their notice of their assigned listing date until the end of 2023 to meet the final deadline of March 23, 2024.
Any employer who is a Covered Business should, if they have not already done so, register with IDOL providing contact details for key personnel to ensure that future communications and notices are received. IDOL requests the names and email addresses of three key sales personnel from each Covered Company. It is important to note that the fact that IDOL does not assign a registration date does not exempt a Covered Business from compliance.
If a business does not currently employ 100 or more employees in Illinois (which includes out-of-state remote workers who report directly to an Illinois establishment), registration with IDOL n is not required. However, any business that subsequently employs 100 or more employees in Illinois is required to submit requested contact information to IDOL by January 1 of the following year. He will then be given a deadline to request the certificate. If an employer receives notice from IDOL to recertify their certificate and at that time the employer has fewer than 100 employees in Illinois, the employer must certify in writing to IDOL that they are exempt from the requirements. IEPA certification and declaration.
What can employers do to prepare to apply?
He is strongly recommended that before receiving a notice from IDOL indicating the deadline for submitting your certificate application, Covered Employers should begin reviewing and gathering the relevant data and documents needed to complete and submit the application. This includes “salary statements” and an “equal pay compliance statement”. Employers are also
strongly encouraged to identify and correct any pay equity issues.
With respect to “salary statements,” the IEPA requires all covered companies to submit a copy of their most recently filed EEO-1 report to IDOL. Additionally, all Covered Businesses must compile a list of data for all of their Illinois-based employees during the past calendar year. IDOL has released a covered template that companies can use for this purpose. It requires them to provide information about their Illinois-based employees, disaggregated by gender and by race and ethnicity categories, as outlined in their most recently filed EEO-1 report. It also requires the county in which the employee works, the date the employee started working for the covered company, and any other information IDOL deems necessary to determine whether pay equity exists between employees and to report the total salary paid to each employee during the preceding calendar year, rounded to the nearest hundred dollars.
With respect to the Equal Pay Compliance Statement, a Covered Business must submit a $150 filing fee and a statement signed by an officer, legal counsel, or authorized agent certifying the following:
- That the company complies with the IEPA and “other relevant laws”, including Title VII of the Civil Rights Act of 1964, the Federal Equal Pay Act of 1963, the Illinois Rights and Equal Pay Act of Illinois;
- That the average compensation of female and minority employees is not consistently lower than the average compensation (as determined by the U.S. Department of Labor) of its male, non-minority employees in each of the major job categories in the EEO-1 report for which an employee is expected to perform the job, taking into account factors such as seniority, specific job requirements, experience, skill, effort, responsibility, working conditions employment, education or training, place of work, use of a collective bargaining agreement or other “mitigating factors;
- That the company does not limit employees of one gender to certain job classifications and makes retention and promotion decisions without regard to gender;
- That disparities in pay and benefits be corrected when identified to ensure compliance with equal pay and discrimination laws;
- How often salaries and benefits are evaluated; and
- The company’s approach to determining the level of wages and benefits to be paid to its employees.
The post-application process
Within 45 calendar days of receipt of the request, IDOL must provide the covered company with a certificate of compliance or a statement explaining why a request was rejected. A Covered Business will have 30 days after receiving a rejection notice from IDOL to remedy any deficiencies in the application. A Covered Business that fails to make a good faith effort to comply or that commits multiple violations of the laws identified in the Compliance Certification may result in the suspension or revocation of a Certification, as well as civil penalties of up to at $10,000.
IDOL’s receipt of an Application or issuance of a Certificate does not establish that a Covered Company is in full compliance with the IEPA. Issuance of a certificate by IDOL is also not a defense to any violation of the IPEA found by IDOL, nor a basis for mitigating damages.
According to the IEPA, all individually identifiable informationsubmitted to IDOL as part of or in connection with an Equal Pay Enrollment Application, or otherwise provided by a Covered Business as part of its Equal Pay Compliance Statement, will considered confidential information and exempt from disclosure under the Illinois Freedom of Information Act (FOIA). However, the job category and county-average hourly wage for each gender, race, and ethnicity category of Illinois-based employees of each company covered on the Certificate of Registration is not confidential information. and may be disclosed under the FOIA. Current employees of a Covered Company may request data regarding their job classification or title and the salary for that classification; however, no individually identifiable information may be provided to an employee making this request. IDOL may also share identifiable data and information with the Illinois Department of Human Rights or the Illinois Attorney General’s Office. Finally, IDOL’s decision to issue, deny, revoke or suspend an Equal Pay Registration Certificate is considered public information.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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