By: Paige Moricz, PHR
Key Takeaways:
- Starting January 2025, Illinois employers must disclose pay and benefits in job postings to promote pay equity.
- Employers must communicate salary ranges, promotion opportunities, and keep detailed records of postings and pay data.
- Fines range from $250 to $10,000 for failing to meet the law’s transparency requirements, depending on the severity and frequency of violations.
Illinois has joined a growing group of states that have enacted so-called “pay transparency” laws, and effective January 1, 2025, Illinois employers will be required to include detailed information about pay and benefits in all job postings.
Having enacted the Illinois Equal Pay Act in 2024, Illinois joins 12 other states that have put in place pay transparency – also called pay equity – laws since 2019.
Why Pay Equity?
States that enact pay transparency laws typically are looking to correct historical inequities in salaries and wages among marginalized groups such as women and minorities. Pay equity advocates for many years have noted that women and minorities are at a disadvantage when applying for a job if they are asked what salary they made in a previous position. Employers have historically used that information to offer lower pay, perpetuating longstanding pay inequities and keeping job holders at a permanent disadvantage in the employment marketplace.
Nationwide, women earn less than men do in more than 90% of occupations – and these disparities are even greater for women of color and women with disabilities.
The Illinois law will apply to employers with 15 or more employees and mandate that employers:
- Disclose the wage or salary range and a general description of benefits and other compensation expected for a position. This includes bonuses, stock options and other incentives.
- Inform current employees about promotion opportunities no later than 14 calendar days after posting the position externally.
- Require employers to maintain records of job postings, pay scales, benefits and wages for each position for at least five years.
Penalties for Noncompliance
The Illinois Department of Labor will oversee the enforcement of the Pay Equity Law. The department may initiate investigations at its discretion or upon receiving complaints from individuals who claim to be negatively affected by a violation of the pay scale and benefits disclosure requirements. Complaints by individuals must be submitted within one year of the alleged violation.
Upon determining that a violation has occurred, the department will issue a notice to the employer detailing the violation, applicable penalties and a specified period for the employer to correct the issue. Penalties vary based on whether the noncompliant job postings are active at the time of the department’s notice and whether the employer has previous violations.
For active job postings:
- First offense: Employers are given a 14-day cure period to remedy the violation, followed by a fine not to exceed $500.
- Second offense: A 7-day cure period is provided, with fines up to $2,500.
- Third or subsequent offense: No cure period is allowed, with fines up to $10,000.
For non-active job postings:
- First offense: Fines up to $250.
- Second offense: Fines up to $2,500.
- Third or subsequent offense: Fines up to $10,000.
To determine whether a posting is “active,” the department may consider factors such as whether the position has been filled, how long the posting has been accessible to the public and whether the employer is still accepting applications. The department has discretion to waive or tailor penalties based on the size of the business and the severity of the violation.
What Employers Should Do to Prepare
Employers should review their job posting and promotion practices to ensure compliance with the new requirements before the law takes effect on January 1, 2025. This includes implementing processes to ensure that pay ranges and benefits are disclosed in covered job postings and establishing procedures to communicate promotion opportunities to current employees. It is also crucial to ensure that third parties engaged to post jobs are provided with the required pay and benefits information.
If you have questions about how your company may be impacted by the Illinois Pay Equity Law, or would like help in preparing for the law’s requirements, contact your KRD advisor.
