August 06, 2019

Don't Show Me the Money: Illinois Employers Soon Can't Request or Consider Wage History in Hiring

Illinois employers will have new restrictions on asking applicants about salary history or relying on that information in the hiring process following a recently signed amendment to the Illinois Equal Pay Act of 2003 (the law). The amendment also modifies the standard for bringing a claim under the law. The law goes into effect on September 29, 2019.

Lowered: The Threshold for Establishing an Equal Pay Claim

The amended law prohibits employers from paying unequal wages to women and men for (1) the same or substantially similar work (as opposed to the former standard of “equal work”) (2) on jobs requiring substantially similar skill, effort and responsibility, and (3) that is performed under similar working conditions.

Prohibited: Asking About Wage and Salary Histories

Here’s what employers cannot do under the amendment:

  • Screen job applicants based on their current or prior wages or salary histories (including benefits or other compensation) by requiring an applicant’s wage or salary history satisfy minimum/maximum criteria
  • Request a wage or salary history as a condition of being considered for employment, being interviewed or continuing to be considered for an offer of employment
  • Request that an applicant disclose wage or salary history as a condition of employment
  • Seek wage or salary history (including benefits or other compensation) about a job applicant from any current or former employer. (However, this does not apply if the wages or salary history are a matter of public record or if the job applicant is a current employee who is applying for a position with the same current employer)
  • Require an employee to sign a contract or waiver that prohibits the employee from disclosing information about the employee’s wages, salary, benefits or other compensation
  • Discharge any employees who fail to comply with any wage or salary history inquiry

What if a job applicant voluntarily and without prompting discloses wage or salary history (including benefits or other compensation) during an interview process? The law specifically states that employers are not in violation of the law when this happens. However, an employer cannot consider or rely on the voluntary disclosure as a factor in determining:

  • Whether to offer the job applicant employment
  • Whether to make an offer of compensation
  • Future wages, salary, benefits or other compensation

Not Specifically Prohibited: Discussing Compensation Expectations

Here’s what employers can do under the amendment (not specifically prohibited), with words of caution:

  • Ask about a job applicant’s compensation expectations — but be careful not to elicit any additional information about the job applicant’s wage or salary history in the process
  • Provide information about compensation offered for the subject position and ask whether it meets the candidate’s expectations — but be careful not to create the impression that the employer is indirectly soliciting prohibited compensation information.

The Risks: Remedies and Civil Penalties

An individual may bring a civil action within five years and recover “any damages incurred” and “special damages” up to $10,000, injunctive relief, costs and reasonable attorney’s fees. Further, employers are subject to civil penalties up to $5,000 for “each violation for each employee affected.”

Recommended Steps and Action Plan

In light of the amendment, Illinois employers should take the following three actions:

  1. Review their application forms and remove any questions eliciting salary history information.
  2. Train employees involved in the hiring process about how to appropriately discuss the employer’s compensation expectations.
  3. Review their employee handbooks, policies and employment agreements to ensure they do not prohibit employees from discussing compensation information with other employees.
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