Time is Now to Comply with Salary History Law
Many Illinois employers returning from summer holiday are facing a rude awakening as they discover that they now have less than a month – until September 29, 2019, to be precise – to revamp longstanding hiring practices or face sizable liability.
As we previously reported here, earlier this summer Governor J.B. Pritzker signed into law a bill adding new teeth to Illinois’ Equal Pay Act. The reforms aim to chip away at the persistent national gender pay gap, by prohibiting employers from inquiring into job applicants’ pay history in certain instances and from imposing rules that prevent workers from sharing salary information under some situations. Lawmakers wrote the law to become effective only 60 days after enactment.
The law will take many hiring managers by surprise precisely because it upends a longstanding assumption that it’s permissible for a hiring manager to screen candidates and set terms of job offers based on what they’ve earned on past jobs. As a result, employers with hiring plans on the horizon are likely to experience a flood of lawsuits unless they act quickly to retrain hiring staff and adjust recruitment processes quickly.
To ease the burden, we’ve summarized below some of the key requirements of the new law.
Don’t Ask About Pay History or Let it Influence Hiring or Compensation Decisions
First and foremost, it will now be unlawful for an employer or employment agency to:
- Screen job applicants based on current or prior wages or salary histories, including benefits or other compensation, by requiring that a pay history of an applicant satisfy minimum or maximum criteria;
- Request or require a wage or salary history as a condition of being considered for employment, as a condition of being interviewed, as a condition of continuing to be considered for an offer of employment, as a condition of an offer of employment or an offer of compensation;
- Request or require that an applicant disclose wage or salary history as a condition of employment; or
- Consider or rely on an applicant’s voluntary, unprompted disclosure of current or prior wage or salary history, including benefits or other compensation, in determining whether to offer a job applicant employment, in making an offer of compensation, or in determining future wages, salary, benefits or other compensation.
Likewise, with certain exceptions, it will be unlawful for an employer to seek wage or salary history, including benefits or other compensation, of a job applicant from any current or former employer.
It remains lawful, however, to discuss with applicants their expectations with respect to compensation.
Don’t Require Employees to Keep Their Pay Confidential
It will also be unlawful to require an employee to sign a contract or waiver that would prohibit the employee from disclosing or discussing information about the employee’s wages, salary, benefits or other compensation.
The “Teeth” in the Law and What to Do Now
Perhaps most significantly, the law specifically makes it unlawful to discharge or otherwise discriminate against any individual who “fails to comply with any wage or salary history inquiry.” And it allows workers up to 5 years to sue employers over violations and allows them to recover compensatory damages, special damages up to $10,000.00, punitive damages and reimbursement of their reasonable attorney fees and costs. It also empowers courts to award additional “civil penalties” of up to $5,000.00 for each violation for each employee affected.
Given these stakes, it’s important that employers act now to ensure compliance as quickly as possible. Aside from making certain recommended hiring process changes, which we describe here, human resources must train managers to break the age-old habit of asking applicants “How much do you currently make?” and factoring the response into their staffing decisions.
Never miss an update from Savine Employment Law, Ltd! Subscribe to our blog by clicking the feed icon next to our social icons. You must have a feed reader installed on your browser. We like feedly. Or, join the conversation on social media through our presence on LinkedIN, Facebook and Twitter.
Gary Savine is an Illinois employment lawyer and founder of Savine Employment Law, Ltd. in Chicago. Gary regularly advises human resources professionals on recently enacted employment laws.