Monthly Minute Memo
Illinois Bans Salary History Inquiries
Illinois joins approximately 16 other states, and 19 localities, in adopting some form of a salary history ban law. On July 31, 2019, Illinois Governor J.B. Pritzker signed into law House Bill 834, amending the Illinois Equal Pay Act (“IEPA”). In general, the law prohibits employers from inquiring into a job applicant’s salary history. The law takes effect only two months after signing, on September 29, 2019.
The amendment to the IEPA has three main parts:
- Prohibits employers from inquiring as to an applicant’s salary history;
- Bans employers from asking or requiring employees to keep pay information confidential;
- Changes the way that equal pay claims are evaluated and defended.
- Employers Are Prohibited From Inquiring About Salary Histories
The new amendment prohibits employers from screening job applicants based on their current or prior salary history and other compensation and benefits information. It also prohibits employers from requesting or requiring applicants to disclose information about their salary or compensation history as a condition of being interviewed, considered for employment, or offered employment. Under the new amendment, employers may not solicit salary history information from an applicant’s former employer. However, the ban on salary history inquiries do not apply if the applicant’s salary history is a matter of public record or if the applicant is one of the employer’s current employees.
The law, however, does not bar employers from providing information about the wages, benefits, compensation, or salary offered in relation to a position. In addition, employers are not prohibited from engaging in discussions with an applicant about the applicant’s expectations with respect to wage or salary, benefits, and other compensation. If an applicant voluntarily provides his/her salary history information, employers may not factor that information into compensation or hiring decisions.
Employees may bring a private cause of action for violations of the IEPA. Employers that violate these new provisions can be liable for (1) up to $10,000 in special damages; (2) compensatory damages, to the extent they exceed an award of special damages; and (3) payment of attorneys’ fees and costs.
2. Employees Must Be Free to Discuss Wages/Compensation
The law also amends the IEPA to prohibit employers from requiring employees to refrain from disclosing information about their salary, wages, compensation, and/or benefits. Employers, however, may still prohibit human resources employees, supervisors, or any other employee whose job responsibilities require or allow access to other employees’ wages or salary information from disclosing that information without the prior written consent of the employee whose information is sought or requested. Although this is new from a state law perspective, it is consistent with long-standing law pursuant to the National Labor Relations Act.
3. Changes To The Way That Equal Pay Act Claims Are Evaluated and Defended
Currently, the IEPA prohibits employers from paying employees of different sexes or races at different rates for “work on jobs the performance of which requires equal skill, effort, and responsibility.” As amended, the IEPA now states that employers may not pay differently for “work on jobs the performance of which requires substantially similar skill, effort, and responsibility.” 820 ILCS 112/10(a).
Currently, an employer may assert a defense to such a claim where the alleged disparity in pay is due to, among other things, a differential based on any other factor than: (i) sex or race or (ii) a factor that would constitute unlawful discrimination under the Illinois Human Rights Act. However, the amendment changes the defense to require employers to additionally show that the pay differential is based on a factor that “(A) is not based on or derived from a differential in compensation based on race [or sex], or another protected characteristic; (B) is job-related with respect to the position and consistent with a business necessity; and (C) accounts for the differential.” 820 ILCS 112/10(a). This change broadens the basis for a claim by an employee and will require further evaluation by employers of any pay differentials.
4. Actions to Take Now
Similar to omitting requests for criminal history information on applications, pursuant to the 2015 Illinois Job Opportunities for Qualified Applicants Act, employers should review their current job applications to ensure that the applications do not solicit information about prior wages, salary, or compensation. Employers should train all individuals who are involved in the recruiting process to ensure that during interviews they do not ask questions regarding prior salary or compensation history. Also, employers should review their salary and/or compensation structures to determine and evaluate reasons for pay differentials to ensure compliance with the IEPA.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between K|D and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions.