1. In general – Public Act 101-0221¹

On August 9, 2019, the State of Illinois enacted the Public Act 101-022, which goes into effect on January 1, 2020.  The new Workplace Transparency Act and amendments to the Uniform Arbitration Action, Illinois Human Rights Act, and Victims’ Economic Security and Safety Act impact existing and future employment relationships as some provisions apply retroactively.  Additionally, the amendments to the Equal Pay Act enacted in 2003 and amended on July 31, 2019, took effect on September 29, 2019.

In summary, the Illinois Equal Pay Act (IEPA) expands the parameters for assessing sex or race discrimination in the payment of wages; the Workplace Transparency Act (WTA) amended the Illinois Human Rights Act (IHRA) broadening the scope of its application and regulating specific contractual clauses, such as confidentiality clauses.  The Illinois Victims Economic Security and Safety Act (VESSA) has been amended to offer more protection to certain categories of employees and victims of sexual violence. 

The above amendments are mandatory for all employers having one or more employees in the State of Illinois.  Therefore, employers may need to amend their existing employment contracts and/or their policies to adhere to new requirements under the law and avoid civil monetary penalties.

 A short summary of the above new provisions and/or amendments follows:

2. Illinois Equal Pay Act (“IEPA”)

Following the examples of other States, such as Alabama, California, Massachusetts, New York and Washington, Illinois, through Public Act 101-0177, IEPA prohibits paying lower wages to employees, based on race or sex.  IEPA specifically prohibits employers and employment agencies from: 

• screening job applicants based on their current or prior wages or salary histories, including benefits or other compensation, by requiring that the wage or salary history of an applicant satisfy minimum or maximum criteria,

• requesting or requiring a wage or salary history (a) as a condition of being considered for employment, (b) as a condition of being interviewed, (c) as a condition of continuing to be considered for an offer of employment or (d) as a condition of an offer of employment or an offer of compensation;

• requesting or requiring that an applicant disclose wage or salary history as a condition of employment,

While the applicant may still disclose to employers prior or current salary information voluntarily, employers are not allowed to use the disclosed information to decide whether or not to hire the applicant or set the compensation package for the employee at the time of hiring or in the future.  

In accordance with the IEPA amendments, employers are not allowed to ban employees from discussing their wages, salary, benefits or other compensation with co-workers or other third parties.  However, employers may prohibit a human resources employee, a supervisor, or any other employee, whose job responsibilities require or allow access to other employees’ wages or salary information, from disclosing that information to a third party without prior written consent from the employee whose information is sought or requested.

Lastly, the IEPA amendments expanded the scope of evidence needed to prove discrimination based on unequal wages.  Before the amendment, IEPA prohibited employers from paying a lower salary based on sex or race for work that required “equal” skill, effort, and responsibility, performed under similar working conditions.  Now, the parameter for discrimination is less restrictive.  Employers are prohibited from paying a lower salary based on sex or race for work that requires “substantially similar” skill, effort, and responsibility (no longer “equal”).

Note that violators of the amended Illinois Equal Pay Act may incur fines up to $5,000 for each impacted individual, as well as civil damages up to $10,000.  Employees may bring legal action against the employer within five years after the violation occurred.  

3. Workplace Transparency Act (“WTA”)

            The WTA prohibits employers from unilaterally requiring that a current or prospective employee waive, arbitrate, “or otherwise diminish” existing or future claims, rights, or benefits related to unlawful discrimination, harassment, or retaliation.  This prohibition applies to past, current, prospective employees and contracts entered into, modified, or extended on or after January 1, 2020. Specifically, the WTA provides that employers may not enter into (or keep in place) contracts or agreements with the following clauses: 

• non-disclosure agreements or agreements prohibiting one party from making negative statements about the other (non-disparagement clauses) that cover harassment or discrimination as provided under Section 2-102 of the Illinois Human Rights Act;
• mandatory arbitration clauses without a written exception for claims of harassment or discrimination as provided under Section 2-102 of the Illinois Human Rights Act. Although unilateral arbitration provisions or agreements are common and usually a condition of employment, starting from January 1, 2020, unilateral arbitration provisions or agreements would be considered void under the WTA.  

Moreover, in the case of settlement or separation agreements that resolve legal claims or disputes, the employer and employee may agree to non-disclosure clauses or non-disparagement clauses if: 

• the legal claims accrued or the disputes arose before the settlement agreement or separation agreement was executed;

• the clauses are mutually agreed upon by and mutually beneficial to the employer and employee;

• the employee or applicant has 21 calendar days to consider the agreement before it is executed; and 

• the employee or applicant has 7 calendar days following execution of the agreement to revoke the agreement. 

4. Illinois Human Rights Act (“IHRA”)

The IHRA introduced the following new definitions to expand the protection of employees that may be the subject of discrimination and harassment: 

“Employer” includes any entity that employs one or more person (instead of 15) within Illinois during 20 or more calendar weeks within the calendar year of or preceding the alleged violation. The definition includes management and supervisory employees. Employers will be held liable for harassment of non-employees by its non-managerial and non-supervisory employees only if the employer has actual knowledge of the conduct and fails to take reasonable corrective measures. 

“Unlawful Discrimination” includes discrimination against a person because of his or her “actual or perceived” race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy, or unfavorable discharge from the military.

“Harassment” includes any “unwelcome conduct” on the basis of a person’s “actual or perceived” race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy, or unfavorable discharge from the military, that “has the purpose or effect of substantially interfering with the individual’s work performance or creating an intimidating, hostile, or offensive working environment.” 

“Working environment” is not limited to a physical location an employee is assigned to perform his or her duties and can, thus, occur outside the office.

“Harassment of Non-Employees” the IHRA prohibits the harassment (including sexual harassment) by an employer against non-employees, including contractors, consultants, and anyone else “directly performing services for the employer pursuant to a contract with that employer.”

Additionally, the IHRA amendments obligate employers to provide the following reports:

• on July 1, 2020, and on a yearly basis thereafter, employers shall disclose to the Illinois Department of Human Rights (IDHR) any adverse judgment or administrative ruling against the employer for discrimination and harassment in the preceding calendar year; and

• starting from January 1, 2020, and on a yearly basis thereafter, every employer “with employees working in Illinois” must implement the model sexual harassment prevention training program created by IDHR or establish its own sexual harassment prevention training program that equals or exceeds the minimum standards under the statute. 

Employers who do not comply with the obligations under sections (i) and (ii) above are subject to civil monetary penalties.

5. Victims’ Economic Security and Safety Act (“VESSA”)

VESSA currently specifies that an employer must provide up to twelve (12) weeks of unpaid leave per any 12-month period for an employee to address issues arising from domestic violence, sexual violence, or stalking.  The amendments to VESSA, which take effect on January 1, 2020, expand protection measures to victims of gender violence.  The amendments define gender violence as violence or aggression satisfying the elements of State criminal offense, at least in part, on the basis of a person’s actual or perceived sex or gender, whether or not criminal charges were filed, prosecuted or resulted in conviction.  The employee may take this leave irregularly or on a reduced work schedule.  The leave may be used for seeking medical attention for or recovering from such conduct, obtaining services from a victims’ services organization, obtaining psychological or other counseling, safety planning, seeking legal assistance and/or participating in any legal proceeding related to such conduct, etc. 

6. Conclusion

The above referenced changes in Illinois employment laws may require employers to reassess employment contracts, arbitration agreements, separation agreements policies on discrimination and equal pay.  Additionally, employers should be engaged in implementing a plan to comply with annual reporting and training requirements.  We recommend all employers, including small business employers, review their employment agreements, handbooks, employee salaries, and/or leave policies, to ensure compliance with the obligations enacted by the new Illinois employment laws.  Please do not hesitate to contact us to discuss specific subjects and assist in making those changes necessary to comply with the new employment laws.