Illinois Employers Face New Restrictions on Job Applicant InquiriesAugust 2019
Illinois employers may no longer ask job applicants about their wage or salary history. This is the main headline arising from significant amendments to the Illinois Equal Pay Act (IEPA) that will go into effect on September 29, 2019. These amendments also encourage open discussion of wages among workers, lower the threshold required for proving a violation, and increase the penalties for non-compliance. Taken together, IEPA amendments sharpen the state’s focus on preventing wage discrimination.
Asking about Pay History
Taking part in a nation-wide trend, Illinois joins 17 states and 18 major municipalities in banning employers from asking job applicants to disclose their pay history. Although employers commonly use applicants’ pay history to measure an appropriate starting pay upon hire, critics of this practice argue that it serves to perpetuate historically discriminatory wage practices. Instead of providing a fresh start, they contend, underpaid applicants are further harmed by having to memorialize their discriminatory pay on their next job application.
In response, Illinois will now make it unlawful to request or require pay history from an applicant as a condition of being interviewed, considered for a job, or continuing in employment. The IEPA likewise prohibits employers from seeking out pay information from an applicant’s prior employer. And even if an applicant voluntarily discloses their pay history without being prompted, the employer may not consider the voluntary disclosure as a factor in determining whether to extend a job offer or in setting starting pay.
Not all pay-related discussion is banned, however. Employers remain free to discuss an applicant’s pay expectations during the interview process. This is the approach that wise employers will take in the wake of the IEPA amendments. Likewise, employers should revise their now-outdated job applications to remove questions about compensation history.
Prohibiting Discussion about Wages
Even before the new amendments, and consistent with federal labor law, the IEPA made it unlawful for employers to prohibit their employees from discussing their pay. But the new amendments go a step further, preventing employers from compelling employees to sign any contract or waiver prohibiting them from “disclosing or discussing information about the employee’s wages, salary, benefits, or other compensation.” The breadth of this language should prompt employers to revisit confidentiality provisions in their employment and nondisclosure agreements to ensure they comply.
Equal Pay Claims and Damages Expanded
Since it first became law in 2003, the IEPA prohibited employers from paying employees differently based on sex. In November 2018, an earlier amendment expanded the coverage to prohibit pay discrimination against African-Americans. The new amendments expand the law still further, by lowering the threshold for an employee to show an equal pay violation. While the statute formerly compared workers in jobs requiring “equal skill, effort, and responsibility,” the new amendments allow comparison of jobs to the performance of which requires substantially similar skill, effort, and responsibility.” The simple replacement of the word “equal” with “substantially similar” broadens the universe of individuals who could potentially succeed on a claim of unequal pay.
Furthermore, the new law will significantly expand the kinds of damages available to workers suing for recovery under the IEPA. Prior to this amendment, workers were able to recover only the amount of any wage underpayment along with costs and reasonable attorneys’ fees. Going forward, successful plaintiffs may also recover compensatory damages, injunctive relief and even punitive damages.
Before the IEPA amendments take effect on September 29, 2019, Illinois employers would be well advised to evaluate their recruiting and compensation practices to account for the three primary changes to equal pay law in the state. This might include (1) revising job applications and training managers to avoid pay history inquiries; (2) making necessary changes to employment and nondisclosure agreements to permit employees’ discussion of pay; and (3) reviewing current compensation practices to ensure that employees in substantially similar jobs are paid the same or that a permitted factor other than sex or race (such as seniority) accounts for any difference.
If you have questions about the amendments or need help evaluating your recruiting or compensation practices, contact a Lewis Rice Labor & Employment attorney.