Illinois General Assembly Semi-Adjourns…
Many Changes Coming for Employers
Lawmakers have gone home with the likelihood of returning in the next few weeks to consider an omnibus energy bill that includes over $600 million in subsidies to Exelon Corp needed to keep several Exelon nuclear plants from shutting down.
This was a session that was all about cutting losses and reducing troubling bills to something we can live with when it comes to employment law legislation.
It started at the beginning of the year during the Lame Duck Session of the 101st General Assembly. One of the legislative Black Caucus agenda items during Lame Duck was economic equity which was embodied in SB 1480 and signed into law by Gov. Pritzker. This new law, effective March 23, 2021, placed extensive restrictions on employer use of criminal history in employment decisions and added a new requirement for employers of 100 or more employees to file significant wage and employment data with the Illinois Department of Labor to certify they are in compliance with federal and state equal pay and discrimination laws. One of our victories summarized below was SB 1847 which was a trailer bill to SB 1480. SB 1847 will make compliance with the Equal Pay Certificate Registration requirements easier for employers.
We also were able to prevent several terrible proposals from moving. Issues like replacing Illinois’ employment “at will” standard with a “just cause” approach to employment discipline and terminations was an important victory. However, I do not believe this issue will be going away any time soon. I am confidant activists in support of eliminating employment at will are coming back in the near future pushing for their legislation.
Proposed Constitutional Amendment Would Eliminate Freedom to Choose
A major issue that was approved with bipartisan support was SJRCA 11 sponsored by Sen. Ram Villivalam (D-Chicago) and Rep. Marcus Evans (D-Chicago). SJRCA 11 would add to the Bill of Rights Article of the Illinois Constitution that employees shall have the fundamental right to organize and to bargain collectively through representatives of their own choosing for the purpose of negotiating wages, hours, and working conditions, and to protect their economic welfare and safety at work. It prohibits any law state or local that interferes with, negates, or diminishes the right of employees to organize and bargain collectively over their wages, hours, and other terms and conditions of employment and workplace safety, including any law or ordinance that prohibits the execution or application of agreements between employers and labor organizations that represent employees requiring membership in an organization as a condition of employment. It now will be placed on the November 2022 ballot. It would be effective upon approval by 60% of those voting on the amendment or a majority of those voting in the election.
Employment Law Bills Going to Governor
HB 53: VIDEO INTERVIEW DEMOGRAPHIC (Rep. Andrade, D-Chicago/Sen. Connor, D-Joliet)
Amends the Artificial Intelligence Video Interview Act to require employers that rely solely upon artificial intelligence to determine whether an applicant will qualify for an in-person interview to gather and report certain demographic information to the Department of Commerce and Economic Opportunity. Requires the Department to analyze the data and report to the Governor and General Assembly whether the data discloses a racial bias in the use of artificial intelligence. Chamber Neutral
HB 117: SECURE CHOICE SAVINGS PROGRAM (Rep. Guzzardi D-Chicago/Sen. Martwick D-Chicago)
As amended, the Act will apply to employers with at least 5 employees, rather than at least one employee. (Current law applies to employers with more than 25 employees.) Newly covered employers will be done in two waves – employers with 16 to 24 employees will have a deadline to comply of no sooner than September 1, 2022 and employers with 5-15 employees will have a deadline to comply of no sooner than September 1, 2023. Small employers may, but are not required to, establish payroll deduction arrangements for retirement savings arrangements. Modifies the enforcement process so that employers have an additional chance to come into compliance after receiving the notice of proposed assessment from the Department of Revenue – they will be given 120 days to come into compliance and if they do, any penalty fees assessed will be waived. Chamber Neutral
HB 118: PENALTY INCREASES FOR UNPAID WAGES (Rep. Guzzardi/Sen. Villa, D-W. Chicago)
HB 118 amends the Wage Payment & Collection Act to provide that an employee is entitled to recover damages of 5% (rather than 2%) of the amount of any underpayments in wages for each month following the date of payment during which such underpayments remain unpaid. Chamber OPPOSED
HB 3582: EXPANSION OF VESSA (Rep. Robyn Gabel D-Evanston/Sen. Robert Peters D-Chicago)
Expands the Victims' Economic Security and Safety Act (VESSA) covering: 1) victims and family members of victims of crimes of violence (in addition to victims of domestic violence, sexual violence, and gender violence) and 2) any individual whose close association with the employee is the equivalent of a family relationship. An amendment eliminating a civil action option was agreed to by the Council. With removal of the civil action the Chamber is Neutral.
SB 258: HEALTH INSURANCE/MARRIAGE DISSOLUTION (Sen. Hastings D-Frankfort/Rep. Burke D-Chicago)
Amends a Section of the Illinois Marriage and Dissolution of Marriage Act regarding health insurance coverage for children. Defines "insurance obligee" as an individual to whom a health insurance obligation is owed on behalf of a child and "insurance obligor" as an individual who has an obligation to provide health insurance for a child. Changes certain terminology in the Section to conform to the new defined terms. Deletes language providing that the court shall enter an order for health insurance coverage of the child upon the request of the obligee or the public office in charge of child support enforcement. Deletes certain requirements concerning the procedures and notice obligations governing an application for insurability following the entry of an order. Deletes language providing that the court shall order the obligor to reimburse the obligee for 50% of the premium for placing the child on his or her health insurance policy under certain circumstances. Deletes language providing that the court may order the obligor to reimburse the obligee for 100% of the premium for placing the child on his or her health insurance policy. Deletes language providing that the obligor shall be liable to the obligee for the dollar amount of the premiums that were not paid. Provides that an employer may eliminate a child from the insurance obligor's health insurance coverage if the employer no longer provides a group health insurance plan to any employees or the child is no longer eligible for coverage due to federal or State restrictions. Chamber Neutral
The Council and other business groups working with the Illinois Department of Labor (IDOL) agreed to amendments that make several important changes to the Equal Pay Act mandate for Illinois employers of 100 or more. Current law requires extensive wage and personnel data to IDOL and certify compliance with federal and Illinois equal pay and discrimination laws. The legislation’s positive changes include 1) delaying the effective date 2) providing privacy protection to individual corporate and employee data and 3) replacing the 1% of gross profit with a definitive penalty. Chamber SUPPORT
SB 1905: HEALTH INSURANCE BENEFIT DISCLOSURE REQUIREMENTS (Sen. Julie Morrison D-Highwood/ Rep. Margaret Croke D-Chicago)
House amendment 1 to SB 1905 creates the Consumer Coverage Disclosure Act to require employers to disclose to employees the differences under the employees' health coverage and health coverage providing essential benefits under health plans regulated by the State of Illinois. Directs the Department of Insurance to provide information outlining the essential benefits and other benefits under coverage regulated under State law. Provides for enforcement by the Department of Labor. Authorize the imposition of civil penalties, if after notice of noncompliance, an employer does not come into compliance within 30 days. Chamber Neutral
SB 2486: PERSONNEL RECORDS STATUTE OF LIMITATIONS (Sen. Villivalam D-Chicago/Rep. Evans D-Chicago)
Amends the Personnel Record Review Act allowing an individual to file a complaint with the Director of Labor or commence an action alleging a violation within 3 years after the date of the disclosure of a disciplinary action. Chamber Neutral
Employment Discrimination and Workplace Agreements
HB 121: HUMAN RIGHTS-WORK AUTHORIZATION (Rep. Guzzardi/Se. Ram Villivalam D-Chicago)
HB 121 provides that it is the public policy of the State to prevent discrimination based on the specific status or term of status that accompanies a legal work authorization. It defines "work authorization status" as the status of being a person born outside of the United States, and not a U.S. citizen, who is authorized by the federal government to work in the United States. A Council requested amendment that has been added clarifies that an employer is not required to sponsor, either monetarily or otherwise, any applicant or employee to obtain or modify work authorization status, unless otherwise required by federal law. Chamber SUPPORT
HB 1207: EQUAL PAY/DEFERRED COMPENSATION (Rep. Moeller D-Elgin/Sen. Castro D-Elgin)
Affirmatively provides that an employer may request an applicant to verify the aggregate amount of unvested equity or deferred compensation the applicant would forgo by resigning the applicant's current position. Chamber Neutral
HB 1838: DEFINITION OF DISABILITY (Rep. Mah D-Chicago/Sen. Villivalam)
Adds to the Illinois Human Rights Act that discrimination based on disability includes unlawful discrimination against an individual because of the individual's association with a person with a disability. Chamber Neutral
SB 672: NON-COMPETE/NON-SOLICIT AGREEMENTS (Sen. Hunter D-Chicago/Rep. Burke D-Chicago) For a complete summary of SB 672, contact Jay Shattuck.
Since February of 2020, The Illinois Chamber Employment Law Council has been in negotiations with the National Employment Lawyers Association (NELA) on changes to the Illinois Freedom to Work Act. The proposal generally makes reasonable limitations on covenants not to compete and covenants not to solicit and provides employers greater clarity and certainty as to whether their covenant not to compete or covenant not to solicit will meet judicial scrutiny. If approved by the Governor, the changes will go into effect January 1, 2022 and applies to covenants not to compete and covenants not to solicit entered into after the effective date. Chamber SUPPORT
Workers’ Compensation
HB 1957: GROUP WORKERS’ COMPENSATION POOLS (Rep. Thad Jones D-Calumet City/Sen. Napoleon Harris D-Dolton)
This is a Department of Insurance initiative. The legislation makes changes to the filing due date applicable to actuarial opinions as to the sufficiency of the loss and loss adjustment expense reserves for group workers' compensation pools from June 1 to March 1 of each year. Chamber Neutral
HB 3662: MRSA Presumption (Rep. Marcus Evans D-Chicago/Sen. Linda Holmes D-Aurora)
Amends the Workers' Compensation Act. Provides that, with respect to firefighters and emergency medical technicians, a contagious staph infection, including Methicillin-resistant Staphylococcus aureus (MRSA), is rebuttably presumed to arise out of and in the course of employment. Effective immediately. Chamber OPPOSED
SB 1993: TRANSFER of IWCC INSURANCE COMPLIANCE DIVISION to DOI (Sen. Tony Munoz D-Chicago/Rep. Bob Morgan D-Highwood)
Transfers all powers, duties, rights, responsibilities, personnel, books, records, papers, documents, property (real and personal), contracts, causes of action, and pending business of the Insurance Compliance Division within the Illinois Workers' Compensation Commission to the Department of Insurance. When reports or notices are to be made or given or papers or documents furnished or served by any person to or upon the Insurance Compliance Division, they shall be made, given, furnished, or served in the same manner to or upon the Department of Insurance. The amendatory Act does not affect any act done, ratified, or canceled, any right occurring or established, or any action or proceeding had or commenced in an administrative, civil, or criminal cause by the Insurance Compliance Division before the amendatory Act takes effect. Amends the Workers' Compensation Act replacing references to the Insurance Compliance Division with references to the Department of Insurance. In provisions concerning Department of Insurance oversight, changes the date before which insurers licensed to write workers compensation coverage in the State must record and report specified information concerning claims from March 1 to June 1 of each year. Deletes a provision stating that the fraud and insurance non-compliance unit shall procure and implement a system using advanced analytics for the detection and prevention of fraud, waste, and abuse. Effective July 1, 2021. Chamber SUPPORT
SB 2017: BIMP/IWCC SALARIES (Sen. Harmon D-Oak Park/Rep. Harris D-Chicago)
As part of the 839-page budget implementation act…IWCC Commissioner annual salary to become 70% of a Circuit Court Judge in the Judicial Court constituted by the First Judicial District under the Salaries Act. The Chairman to receive an annual salary of 5% more than the other Commissioners. The Secretary and each arbitrator to receive a salary of 5% less than the per annum salary of Commissioners. (See pages 570-584) The Chamber supports the salary increases.
Unemployment Insurance
HB 2643: UI AGREED BILL (Rep. Hoffman D-Belleville/Sen. Holmes D-Aurora)
With the House Adjournment, HB 2643 was not voted upon in the closing hours of the regular session. The House is planning to return in the next couple of weeks to address unfinished business such as HB 2643. The House will need to concur on the Senate amendment. As amended, the legislation provides:
1. Amends the Identity Protection Act allowing social security numbers to be included in applications and forms sent by mail, including, but not limited to, any material mailed in connection with the administration of the Unemployment Insurance Act pursuant to the limitations and requirements of that Act. Amends the Department of Employment Security Law prohibiting the Illinois Department of Employment Security (IDES) from disclosing an individual's entire social security number in any correspondence physically mailed to an individual or entity. Requires IDES to develop a system of identifying information to be used instead of social security numbers. This change does not apply to electronic data sharing (i.e., SIDES) pursuant to a written agreement containing appropriate security and confidentiality provisions or to an individual's or entity's access to information in the individual's or entity's secure account in the Department's databases.
2. Extends benefits for noninstructional academic personnel until September 4, 2021. The federal government has increased from 50% to 75% the amount it will reimburse the UI Trust Fund. The remaining 25% will be funded from the recent $8.1 billion which is estimated at $65-70 million.
3. Waives collection of benefits overpaid by IDES due to no fault of the claimant. When an individual has received benefits and been found to be ineligible for those benefits, the individual must be provided notice of his or her appeal rights. A claimant will have 45 days from mailing date of the notice to contact IDES to be eligible for the waiver. The estimated net cost to the UI Trust Fund is approximately $25 million. These costs also will be reimbursed to the UI Trust Fund from ARPA funds.
4. For each benefit claim that appears to have been filed other than by the individual in whose name the claim was filed or by the individual's authorized agent (i.e, fraudulent claim) and with respect to which benefits were paid during the prior calendar year, IDES shall annually report to the Department of Revenue information that is in IDES’ possession and may assist in avoiding negative income tax consequences for the individual in whose name the claim was filed.
5. With the written consent of a claimant or employing unit and an agreement not to publicly disclose, the Director shall provide requested information related to a claim to a public officer or his or her agent.
6. For our agreeing to the above changes, Labor agreed to do a joint request with business to the Governor to use a “substantial portion” of ARPA funds to reduce the Trust Fund deficit.
Legislation that Failed
SB 208: Paid Leave Mandate (Sen. Martwick D-Chicago/Rep. Gordon-Booth D-Peoria)
In the closing days of session, negotiations on a paid leave mandate rekindled. The latest version requires paid leave to be paid based on an accrued basis with a minimum of 56 hours earned in a year. Some of the key issues of concern to employers are addressed, especially allowing employer flexibility in implementation. The Chamber supported SB 208 along with other business groups. However, organized labor’s strong opposition put a brick on the measure.
HB 3418: Sexual Harassment Settlements & Disclosure Agreements (Rep. Carroll D-Northbrook/Sen. Connor D-Joliet)
Amends the Workplace Transparency Act prohibiting nondisclosure requirements from being imposed in settlements relating to claims of sexual harassment or sexual assault in the workplace except as they relate to the monetary amount of the settlement or, at the employee's request, when they prohibit disclosure of facts that could lead to the identification of the employee. We have determined that this measure will undue the balance that the Workplace Transparency Act currently enjoys. This compromise law only went into effect on January 1, 2020.
HB 3697: Prevents WC Act to Pre-empt BIPA Action (Rep. Hoffman D-Belleville/Sen. Cunningham D-Chicago)
Provides the Workers' Compensation Act does not preempt or prevent an employee from recovering under the Biometric Information Privacy Act.
SB 995: Criminal Background Information Only Accessible from State Police (Sen. Omar Aquino D-Chicago) Senate amendment 1 pending in Assignments Committee/Senate Third Reading
Amends the Illinois Human Rights Act requiring that conviction records or arrest records used in whole or in part as the basis for any adverse employment action or adverse housing action shall be issued by the Department of State Police. Prohibits an employer from withholding or deducing from the compensation of any employee or require any prospective employee or applicant for employment to pay, any fee for, or cost of, any criminal history record information check, nor shall any employer withhold or deduct from the compensation of any employee, or require any employee to pay any fee for, or cost of, criminal history record information checks.
