When it comes to pay equity, Illinois has some of the most stringent laws in the United States. Along with California, it is the only state to require pay data reporting. As the Illinois Equal Pay Certificate Deadline of March 24, 2024 draws near, here’s what employers need to know. As we also highlight, a major requirement is compliance with the state’s Equal Pay Act of 2003.
Compliance with Equal Pay Act of 2003
Illinois’ Equal Pay Act prohibits employers with four or more employees from pay discrimination based on the “same or substantially similar work,” unless mitigating factors apply such as seniority or merit systems. Specifically, the act has two protected classes — sex and African-American employees.
When SB1480 was passed in March 2021, amending the 2003 Act, it created major changes to pay equity compliance in Illinois.
Illinois Equal Pay Certification Requirements
To receive an Equal Pay Registration Certificate (EPRC) private employers with 100 or more employees must confirm the following:
- Compliance with federal and state equal pay laws. These include Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act, and the Equal Pay Act of 2003.
- Women and minority employees are not paid consistently below the average compensation for male and non-minority employees. That applies to all major job categories in EEO-1.
- Job classifications are not restricted or governed by sex. Decisions on employee retention and promotion must be made without regard to sex.
- Wage disparities are corrected when identified. Employers may provide relevant supporting information to explain pay disparities.
- The frequency of wage and benefit evaluations.
- The company’s compensation philosophy, i.e., the approach taken in determining compensation and benefits.
Employers must also file an EEO-1 with the U.S. Equal Employment Opportunity Commission.
Applications must be filed no later than March 24, 2024. Recertification is required every two years.
All new businesses which meet the employee threshold must obtain an EPRC within three years of launch.
Penalties for Equal Pay Act Violations
Employers that do not meet pay equity compliance in Illinois face sanctions. Applicable penalties include suspension of the EPRC or civil penalties up to $10,000. But non-compliance can have consequences that stretch beyond the financial. The Organization for Economic Cooperation and Development (OECD) notes that avoiding reputational damage is an incentive for employers to comply.
Further, companies that are effective in pay equity enjoy more financial success, are more innovative and are more likely to attract the talent they need. As the skills gap now affects 69% of HR professionals surveyed, pay equity must be a priority.
Strengthening Illinois Pay Equity Law
Legislative changes in Illinois are intended to promote pay transparency and ensure that all employees receive equal pay for substantially similar work.
Like most of the U.S., Illinois has a persistent gender pay gap. Data from the Bureau of Labor Statistics shows that in 2021, women earned 80.7% of men’s earnings. That’s lagging behind states like Vermont, New York, California, and Rhode Island.
Black women fare worse, earning just 61 cents for each dollar White, non-Hispanic men make. That’s below the national pay gap of 67 cents. Black women working part-time are paid a meager 53 cents for each dollar White, non-Hispanic men earn.
In addition to Equal Pay Certification requirements, Illinois is accelerating its efforts to address pay gaps and protect marginalized workers. For instance:
- Illinois’ pay transparency bill comes into force on January 1, 2025, affecting every organization with 15 employees or more. Employers will also be required to post all “opportunities for promotion to all current employees no later than 14 calendar days after the employer makes an external job posting.”
- Illinois is one of only two states to implement an equal pay mandate for temporary workers. On Nov. 17, 2023, HB 3641 amended Illinois Day and Temporary Labor Services Act (HB 2862). Implementation and enforcement of HB 2862 takes effect April 1, 2024.
Achieving Pay Equity Compliance in Illinois
State-of-the-art pay equity software solutions support employers in streamlining the Equal Pay Certificate process and ensuring compliance. Here’s how:
- A pay equity audit is the first step to compliance with equal pay legislation. An intersectional pay equity audit is the only way to accurately identify pay gaps. Trusaic PayParity® conducts a pay equity audit at the intersection of factors such as gender, race/ethnicity, age, disability, and more. Results instantly identify risk areas for remediation and pay gaps within every employee group and at every level in your business.
- Pay equity software solutions like PayParity offer custom remediation strategies. Companies must certify corrective action is taken to address pay disparities as part of Equal Pay Certification requirements.
- Root causes of pay disparities are remedied using advanced analytics and algorithms that pinpoint problematic factors, including biases and faulty systemic processes.
- Pay disparities are resolved with continuous pay gap monitoring to ensure ongoing compliance, making three year EPRC recertification a seamless process.
Time is running out. Act now to meet the deadline for Equal Pay Certificate submission. Speak to one of our pay equity experts.
For more information on how to apply for the EPRC, see our previous blog.
Download Illinois SB1480 whitepaper
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