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September 6, 2023
Update: Illinois’ Department of Labor recently issued Guidance, as well as a Frequently Asked Questions (FAQ) website, to assist employers and employees with understanding the pay transparency amendments to its Equal Pay Act.
Recognizing that pay transparency promotes pay equity, Illinois joins a growing number of states requiring pay transparency in job postings and promotion announcements. Specifically, on August 11, 2023, Illinois amended its Equal Pay Act (EPA), effective January 1, 2025, to require covered employers to disclose wage or salary ranges, benefits, and other compensation in job postings.
Which Employers Must Comply with the EPA’s Pay Transparency Requirements?
All Illinois employers with at least 15 employees must comply.
Which Job Postings Are Covered?
The law applies to job postings (1) for positions that will be physically performed (at least in part) in Illinois and (2) for positions performed outside of Illinois, but for which the employee will report to a supervisor, office, or worksite in Illinois, including hybrid and remote positions.
The law further requires that employers announce, post, or otherwise make known opportunities for promotion no later than 14 calendar days after the employer announces an external job posting for the position.
Additionally, job postings publicized by third parties (including those on job posting sites and by recruiters) are covered under the amended law.
What Information Must Be Disclosed?
Each covered job posting must include pay scale and benefits information. “Pay scale and benefits” includes “the wage or salary, or the wage or salary range, and a general description of the benefits and other compensation, including, but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position, set by reference to any applicable pay scale, the previously determined range for the position, the actual range of others currently holding equivalent positions, or the budgeted amount for the position.”
Employers may satisfy the pay transparency requirements by including on their website a link to the pay scale and benefits information.
Recordkeeping Requirements
Employers must retain records for at least five years that document the pay scale, benefits, and job posting for each position, as well as the name, address, occupation, and wages of each employee in that position.
Next Steps for Employers
Penalties for noncompliance with the law’s pay transparency or recordkeeping requirements are severe. Thus, Illinois employers should begin now to review their job posting templates and their processes for keeping records to ensure compliance before the January 1, 2025 effective date.
*Special thanks to Brooke Palma, our Office Administrator, for her contributions to this article.
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Illinois, Pennsylvania, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
