On January 6, 2023, the Illinois Department of Labor (“IDOL”) published regulations which provide clarity on the amendments to the Illinois Equal Pay Act (“IEPA”). The amendments, made in 2021 to Section 11 of the IEPA, mandate any employer with over 100 employees in the State of Illinois to secure an Equal Pay Registration Certificate from the IDOL, certifying compliance with the Act. The amendments identify numerous requirements for obtaining a Certificate, including:
- Pay a $150 filing fee.
- Provide “wage records”. A list of all employees during the past calendar year, separated by gender and race and ethnicity categories as reported in the Employer’s most recently filed EEO-1 Report.
- Submit an Equal Pay Compliance Statement signed by a corporate officer, legal counsel or authorized agent of the business, providing specific affirmations of compliance with the Act.
Notably, the published regulations lessen the requirements of what must be provided in the wage records tendered to the Department. For example, the regulations do away with requiring the employer to identify the county in which each employee works, the start date of the employee, and a wage calculation based on the prior calendar year.
Numerous sections of the Act benefitted from the clarity brought by the new regulations, including the enrollment requirements. The regulations clarified that any business authorized to transact business in the State of Illinois on or before March 23, 2021, must complete an enrollment form on the IDOL online portal. The form serves as notice to the IDOL that the business is subject to the requirements of the Act and provides the business’ contact information. Any business which becomes authorized to conduct business in the State on or after March 24, 2021 must submit their form by January 1 of the following year.
The regulations also sought to clarify who is considered an “employee” under the Act. The definition of employee found in the regulations borrows heavily from the Illinois Income Tax Act and provides as follows:
A worker who provides a service for a business whose base of operations, or if there is no base of operations, the place from which the service is directed or controlled, is located within the State of Illinois. But if the worker’s base of operations or the place from which the service is directed or controlled is not in any state in which some part of the work is performed, they are still counted for purposes of the Act if the worker resides in Illinois.
With many workers still working remotely, Illinois employers employing such workers should carefully scrutinize the nature of those assignments in order to determine whether the business has the requisite number of employees under the Act.
Businesses are required to certify that its minority and female workers receive an average compensation which is not consistently below the “average compensation” for their non-minority and male counterparts. The regulations clarify that “average compensation” refers to the most recent US Bureau of Labor Statistics State Occupational Employment and Wages Estimates for that specific occupation.
Regarding the requirement of submitting an Equal Pay Compliance Statement, the regulations brought clarity as to what must be contained in the statement to demonstrate “compliance”. Essentially, the business must attest to the following:
The business has had no final non-appealable judgments or rulings in the previous two years arising from claims under the Equal Wage Act, the Equal Pay Act, Title VII of the Civil Rights Act, or the Illinois Human Rights Act.
The business has corrected any final and non-appealable adverse judgment or final and non-appealable administrative ruling entered against it under Title VII of the Civil Rights Act of 1964 , the Equal Pay Act of 1963, the Illinois Human Rights Act (775 ILCS 5), the Equal Wage Act (820 ILCS 110), or the Equal Pay Act of 2003 (820 ILCS 112).
For any business which has corrected a final and non-appealable adverse judgment or ruling, it must submit evidence of the underlying ruling (a copy of the judgment) and identify the corrective measures the employer has taken.
The regulations provide the IDOL with 45 days from receipt of an application in which to issue the Equal Pay Registration Certificate or to issue a Statement of Rejection to the business. If a Statement of Rejection issues, the reason(s) for the rejection will be identified and businesses will have 30 days to address and correct any deficiencies in the application. Businesses wishing to appeal a rejection must start that process within 14 days of receipt of the rejection notice. Relatedly, the regulations impose a duty upon businesses who have previously submitted an incomplete or inaccurate application to submit a revised application with corrected information. When filing a revised application, in addition to providing the correct and complete information, the business should submit a letter articulating the changes made or information supplemented.
While the new regulations offer some clarity to businesses seeking to be compliant with the Illinois Equal Pay Act, plenty of ambiguity remains. Specifically, the definition of “wages” and which data specifically must be tendered to the IDOL in the application process remain areas that could benefit from additional clarity. Accordingly, employers should be mindful of any forthcoming regulations published by the IDOL and consult with an attorney experienced in labor and employment law for assistance in reaching compliance.
The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.