Illinois has become the latest state to enact a pay transparency law. On August 13, 2023, Illinois Governor J.B. Pritzker signed House Bill 3129, amending the Illinois Equal Pay Act of 2003. The amendment becomes effective January 1, 2025.
The amended Equal Pay Act requires Illinois employers with 15 or more employees to disclose “pay scale and benefits” information for all job position postings. “Pay scale and benefits” are defined to include a wage/salary, or wage/salary range, in addition to a general description of benefits such as bonuses, stock options, and other incentives that the employer expects to offer. Employers can satisfy the disclosure requirements by including a hyperlink to a public page that includes pay scale and benefits information for the position. The amended Act does not prohibit employers from asking applicants about their salary or wage expectations. Employers must also announce, post, or make known all promotional opportunities to internal employees no later than 14 days after making an external job posting for a position.
Employers are permitted to use third-parties to make job postings on their behalf. However, those third-parties will also be held liable for their failure to disclose pay scale and benefits information, unless they can show that the employer failed to provide them the required information.
The Illinois Department of Labor is authorized to investigate violations of the Equal Pay Act either at its discretion or upon receiving a complaint from an aggrieved party. Those alleging violations must make their complaint within one year of the alleged violation. The penalties for the failure to disclose pay scale and benefits information are steep. For active job postings, employers can be fined as follows:
- First Offense: $500 maximum fine
- Second Offense: $2,500 maximum fine
- Third and all subsequent offenses: $10,000 maximum fine(s).
The amended Act applies to positions that will be physically, in whole or in part, performed in Illinois and out-of-state or hybrid positions that will report to a supervisor, office, or other worksite in Illinois. Employers with 15 or more employees should prepare to comply with the amended Act by determining the pay and benefits information for each of their positions based in Illinois or reporting to a supervisor in Illinois. Those entities that facilitate job postings for employers should ensure that they are prepared to collect and post accurate wage information, as they too may face liability for failing to abide by the amended Act.
The full text of the amendment can be found here.
