◊The Impact On Your Business Practices ◊

Governor Pritzker signed House Bill 834 last week which amends the Illinois Equal Pay Act to prohibit Illinois employers from seeking an applicant’s compensation history as a condition of employment. The Bill also prohibits an employer from requiring employees to sign agreements which would prevent them from disclosing their compensation to others. (A similar bill had been vetoed by former Governor Rauner in 2017).

The purpose of the salary inquiry ban is to prevent the presumably (and statistically) lower compensation history of women and African Americans from continuing to depress earnings potential. Likewise, the Bill’s provision prohibiting employers from requiring employees to sign non-disclosure agreements regarding their wage/salary, removes impediments to employees identifying race and gender-based compensation discrepancies.

Actions Prohibited

Specifically, the law prohibits employers and employment agencies from:

1. Screening job applicants based on their current or prior wage/salary history, including benefits and other compensation by requiring that the compensation history satisfy minimum or maximum requirements;
2. Requesting or requiring a wage or salary history as a condition of being considered for employment, as a condition of being interviewed, as a condition of continuing to be considered for an offer of employment or as a condition of an offer of employment or an offer of compensation;
3. Requesting or requiring that an applicant disclose wage or salary history as a condition of employment;
4. Seeking wage/salary history, including benefits or other compensation, of a job applicant from any current or former employer.

In other words, unless subject to one of the following exclusions, employers may no longer request compensation history from applicants or from their current or former employers.

Exclusions

These provisions are inapplicable where: (a) the employee’s wage/salary information is a matter of public record through the Freedom of Information Act or is otherwise publicly available (for example, certain public sector employees, executives at publicly traded companies and not-for-profit corporations); or where, (b) the job applicant is a current employee applying for another position with the same employer. In addition, the Bill makes clear that it does not prohibit an employer from (a) providing information regarding the wages/salary, benefits and other compensation offered for a particular position; and from (b) engaging in discussions with an applicant regarding their expectations with respect to wage/salary, benefits and other compensation.

An employer does not violate the Act if an applicant or employee voluntarily, and without prompting, discloses their current or prior wage/salary, benefits and other compensation information, provided that the employer does not rely on the information as a factor in determining whether to offer the applicant employment, in making an offer of compensation or in determining future wages/salary, benefits or other compensation. The proviso is the tricky bit – it does not take much of an imagination to recognize the liability risk where an employee voluntarily discloses their past compensation and is then dissatisfied with the compensation offered for the position for which they are applying.

Damages and Penalties

Private Action

If an employer violates these terms, the employee may sue and recover compensatory damages, “special” damages, not to exceed $10,000 as well as attorney’s fees. An employee may only recover compensatory damages to the extent that they exceed any awarded special damages.

Department Action

The Department has authority to supervise payment of unpaid damages and penalties and to seek injunctive relief as well as to file a lawsuit to recover substantial penalties up to $5,000 per violation of this law.

Statute of Limitations

Employees may bring an action within 5 years from the date of the violation.

Effective Date

September 29, 2019

It is extremely important that all employers with employees in the state of Illinois remove questions on employment applications requesting salary or wage history and cease all screening and interview questions related to salary or wage history. Contact Jennifer Murphy if you would like an example of a compliant application form.

Questions? Contact attorney Jennifer Adams Murphy at (630) 377-1554 or by email at jemurphy@wesselssherman.com