Illinois Department of Labor Announces Opening of Equal Pay Registration Certificate Application Period for Illinois Employers

New obligations under amendments to the Illinois Equal Pay Act, passed by the Illinois General Assembly and signed by Governor J.B. Pritzker last year, take effect on March 24, 2022. As covered in our previous Alert, private businesses with more than 100 employees must obtain equal pay registration certificates from the Illinois Department of Labor (IDOL) between March 24, 2022, and March 23, 2024, and every two years thereafter. To receive these certificates, businesses must submit an application to the IDOL by a registration date that the IDOL will assign. The application requires a list of employee composition data separated by gender and race/ethnicity as well as the total wages paid to each employee in the prior calendar year, along with the employees' job classification, job title, location by county, start date of employment and, if applicable, termination date. The application also requires a signed certification by a corporate officer, legal counsel or authorized agent of the business confirming that the employer complies with federal and state anti-discrimination and equal pay laws and does not differentiate between employees in position or pay (using average wage comparison) based on gender or minority status. Lastly, the application also includes information about the employer's compensation and benefit setting and disparity correction practices. Businesses with multiple facilities in Illinois will submit a single application, together with a $150 application fee.

The requested employee composition data is substantially similar to what large employers are already obligated to compile and report to the Equal Employment Opportunity Commission in their EEO-1 reports. However, Illinois businesses should begin analyzing the additional information on pay composition data and compensation and benefit setting and disparity correction practices now, given the potential penalties and other consequences attached to the new equal pay registration certificate requirements. Specifically, the IDOL has authority to audit and investigate an employer's equal pay registration certificate applications and data submissions, including the ability to depose witnesses and issue subpoenas for relevant documents. Failure to cooperate with these investigations could lead to contempt proceedings against the employer. Additionally, businesses that fail to obtain their equal pay registration certificates could face civil penalties of up to $10,000 per violation and fines of $2,500 to $10,000 per affected employee. Moreover, unlike a business's EEO-1 report, the Illinois Secretary of State will publish the data submitted with employers' equal pay registration certificate applications within 90 days of submission, providing interested parties with detailed employee composition and compensation data.

On January 26, 2022, the IDOL announced that it has begun distributing application registration letters, which will continue throughout the initial two-year compliance period. The IDOL will communicate directly to businesses when it is their time to register, and will do so no less than 120 days in advance of their application registration deadline. The IDOL supplemented its recent press release with the Equal Pay Act registration certificate template. We will review and analyze additional developments and guidance, which we expect from IDOL before the compliance period begins on March 24, 2022.

Given these new equal pay registration certificate requirements, Illinois employers are encouraged to consult proactively with counsel to address employee composition and compensation data compilation, and compensation and benefit setting and disparity correction practices.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.