Businesses with employees in Illinois should be aware that recent amendments to the Illinois Human Rights Act, the Illinois Business Corporation Act and the Illinois Equal Pay Act impose new obligations with respect to the use of criminal background checks in making employment decisions, equal pay reporting obligations and obtaining equal pay registration certificates. The new provisions are summarized below.
Criminal Background Checks in Hiring
Effective immediately, the Illinois Human Rights Act is amended to prohibit Illinois employers from refusing to hire an applicant or taking any adverse action against a current employee based on a prior criminal conviction unless:
- There is a substantial relationship between one or more of the prior convictions and the position sought or held; or
- There would be an unreasonable risk to property or the safety or welfare of specific individuals or the general public if the individual was hired or continued their employment.
In determining whether there is a substantial relationship or an unreasonable risk, the employer must consider the following mitigating factors:
- The length of time since the conviction;
- The number of convictions;
- Nature and severity of the conviction and its relationship to the safety or security of others;
- Facts and circumstances surrounding the conviction;
- Age of the employee at the time of the conviction; and
- Evidence of rehabilitation efforts.
Before taking an adverse action based on the individual’s prior conviction(s), the employer must provide written notice of the intent to take adverse action that identifies the conviction(s) that forms the basis of the preliminary decision, provide the individual with a copy of the conviction history report, and afford the individual at least 5 business days to respond and provide mitigating information.
If the employer then decides to proceed with the adverse action, the employer must notify the individual of the final decision in writing, including the reason for the decision and the specific conviction(s) that resulted in the adverse action. The employer must also advise the individual in writing of any internal procedures to appeal or challenge the decision and notify the individual of their right to file a charge of discrimination with the Illinois Department of Human Rights.
For more information, please review the Illinois Department of Human Rights Frequently Asked Questions on Conviction Record Protection, available here.
Equal Pay Reporting
Beginning January 1, 2023, Illinois businesses that are required to file an EEO-1 report with the Equal Employment Opportunity Commission – generally, businesses with more than 100 employees – will be required to file a similar annual report with the Illinois Secretary of State. The Illinois Secretary of State will publish the data on its official website within 90 days of receipt of the report.
At this time, it is unclear whether employers will be required to report data only for Illinois employees or all employees nationwide, or what the penalty will be for failing to comply with this new requirement. We expect the state to provide clarification in that regard before this requirement takes effect.
Equal Pay Registration Certificates
Employers with more than 100 employees in Illinois will need to obtain an equal pay registration certificate (the “Certificate”) from the Illinois Department of Labor before March 23, 2024, and then recertify every two years thereafter.
To apply for the Certificate, the employer will need to submit to the Illinois Department of Labor a filing fee, gender/race/ethnicity data, compensation data, and a statement signed by an authorized agent of the business.
The signed statement must include:
- That the business is in compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 163, the Illinois Human Rights Act, the Equal Wage Act and the Equal Pay Act of 2003;
- That the average compensation for female and minority employees is not consistently below the average compensation for its male and non-minority employees within each of the major job categories in the EEO-1 report for which the employee is expected to perform work (after taking into account factors such as experience, skill, effort);
- That the business does not restrict employees of one sex to certain job classifications and makes employment decisions without regard to sex;
- That wage and benefit disparities are corrected when discovered;
- How often wages and benefits are evaluated to ensure compliance with the Act; and
- Whether the business, in setting compensation and benefits, utilizes a market pricing approach, state prevailing wage requirements or union contract requirements, a performance pay system, internal audit analysis, or an alternative approach.
An employer who fails to obtain the Certificate or has their certificate revoked will be subject to a civil penalty equal to 1% of gross profits.
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If you have questions or would like additional information, please contact any of our Labor & Employment attorneys or the primary EGS attorney with whom you work.
