Illinois Employers: Prepare to Comply With Significant Amendments to Three Key Employment Laws

On March 23, 2021, Illinois Gov. J.B. Pritzker signed Public Act 101-0656 into law, amending the Illinois Human Rights Act (IHRA), the Business Corporation Act of 1983 and the Equal Pay Act of 2003 in ways that will significantly affect employers. Here’s an overview of what’s coming.

IHRA Amendments

The amendments provide that, generally, it will be a civil rights violation to use a conviction record (information indicating that a person has been convicted of a felony, misdemeanor or other criminal offense, placed on probation, fined, imprisoned or paroled) for any employment decision. There are two narrow exceptions.

First, a conviction record can be used if there is a substantial relationship between one or more of the previous criminal offenses and the employment sought. Determining whether there is a “substantial relationship” requires the employer to consider a number of factors to determine whether the position offers the opportunity for the same or a similar offense to occur, and whether the circumstances leading to the conduct are likely to recur in the employment position. Employers should consider: (1) the length of time since the conviction, (2) the number of convictions that appear on the conviction record, (3) the nature and severity of the conviction and its relationship to the safety and security of others, (4) the facts or circumstances surrounding the conviction, (5) the age of the employee at the time of the conviction and (6) evidence of rehabilitation efforts.

A conviction record may also be used if the granting or continuation of the employment would involve an unreasonable risk to property or the safety of specific individuals or the general public.

If an employer considers mitigating factors and still makes a preliminary decision that the conviction record disqualifies the employee, the employer must notify the employee in writing of the conviction on which the decision is based, and provide a copy of the conviction report and an explanation of the employee’s right to respond. The employee must then be given at least five business days to respond to the notification, and the employer must consider this information before making a final decision. If the employer makes a final decision to take an employment action solely or in part because of a conviction record, the employer must notify the employee in writing of the disqualifying conviction, of any existing procedure for the employee to appeal the decision and of the right to file a charge with the Illinois Department of Human Rights (IDHR). These requirements parallel existing procedural requirements in the Fair Credit Reporting Act for employers that intend to take adverse action based in part on the contents of a consumer report.

Amendments to the Business Corporation Act of 1983

Beginning on January 1, 2023, many Illinois corporations (those required to file EEO-1 with the Equal Employment Opportunity Commission) will be required to provide EEO-1-style information to the Illinois secretary of state. The secretary of state will then publish the data on gender, race and ethnicity of each corporation’s employees on the secretary of state website.

Illinois Equal Pay Act Amendments

Employers with more than 100 employees in the state of Illinois will be required to obtain an equal pay registration certification from the IDHR by March of 2024 or certify in writing that they are exempt. Once the certification is obtained, it will need to be renewed every two years. The business will need to certify:

1. That it is in compliance with Title VII, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act and the Equal Pay Act of 2003
2. That the average compensation for its female and minority employees is not consistently below the average compensation for male and nonminority employees within each of the major job categories in the EEO-1, taking into account mitigating factors such as length of service, requirements of jobs, experience, skill, effort, etc.
3. That the business does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex
4. That wage and benefit disparities are corrected when identified
5. How often wages and benefits are evaluated for compliance

The compliance statement must also indicate how the business sets compensation and benefits. For example, the compliance statement should indicate whether the employer uses: (1) a market pricing approach, (2) state prevailing wage or union contract requirements, (3) a performance pay system, (4) an internal analysis, or (5) an alternative approach to determine what level of wages and benefits to pay its employees. If the business uses an alternative approach, it must provide a description of that approach.

Next Steps for Employers

Employers should review hiring and discipline policies so that conviction records are not the basis of employment decisions. Employers who wish to continue considering conviction records should institute a process to consider whether there is an exception, and whether any mitigating factors apply. Finally, employers should institute a process to provide notice that they are considering a conviction record, and a way for the employee to respond to any decision made based on a conviction record.

Employers should also begin to prepare for additional reporting requirements under the Business Corporation Act of 1983 and the Equal Pay Act of 2003 in coming years.