What You Need to Know About Recent Amendments to Illinois’s Equal Pay Act
As of January 1, 2016, Illinois’s Equal Pay Act (the “Act”) expanded to prohibit all employers, regardless of size, from paying unequal wages to men and women for doing the same or substantially similar work, except if the wage difference is based upon a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or factors other than gender. The previous version of the Act only applied to employers with four or more employees.
The recent amendments to the Act also increase the civil penalties for violation of the law as follows:
- For employers with four or more employees: For a first offense, a fine not to exceed $2,500; for a second offense, a fine not to exceed $3,000; and for a third or subsequent offense, a fine not to exceed $5,000; and
- For employers with fewer than four employees: For a first offense, a fine not to exceed $500; for a second offense, a fine not to exceed $2,500; and for a third or subsequent offense, a fine not to exceed $5,000.
The expansion of the Act to cover all employers is not the only recent amendment of note. As of 2013, officers of a corporation or agents of a company can be held individually liable to pay owed wages for violations of the law by the employer. Although the concept of individual liability has not been litigated, the threat of individual liability certainly provides an important leverage point for plaintiffs bringing claims under the Act.
Otherwise, the law remains the same since its enactment in 2003. In summary, the Act applies to both men and women. Male and female employees must receive equal pay for the same or substantially similar work when they work for the same employer as long as they are both working in the same county. Job titles are not considered determinative of whether or not male and female employees actually perform the same or substantially similar work. If the Illinois Department of Labor commences an investigation, it can investigate up to three years prior to the date the Illinois Equal Pay Act complaint was actually filed. If an employer is found guilty of pay discrimination, the employer, officers of a corporation, or agents of a company will be required to make up the wage difference to the employee (and may be subject to pay legal costs and civil fines discussed above).
To ensure compliance with the law, Illinois employers should consider auditing their payroll practices. Such audits require gathering information necessary to group “similar” jobs, determine whether legitimate factors are responsible for any pay disparity, and analyze whether any disparity is based on gender. Small Illinois employers should also be aware that they are now covered by the Act and may face wage discrimination litigation under state law.
For more information on this topic, register for Kelley Drye and Welch Consulting’s CLE, “Equal Pay for Equal Work? The State of Pay Equity in the U.S.,” on September 14, 2016 that will be live in New York and by webinar.