Illinois is the Latest State to Enact a Salary Transparency Law
Illinois is the latest in a growing trend among states and cities throughout the country to enact salary transparency laws. Illinois joins the ranks of California, Washington and Colorado, among others, requiring employers to disclose pay scale and benefits in job postings. On August 11, 2023, Governor J.B. Pritzker signed House Bill 3129 into law. Like its California, Washington and Colorado counterparts, the Illinois law is rooted in historic pay inequity among marginalized groups. The law amends Illinois’ Equal Pay Act and, beginning January 1, 2025, requires employers with 15 or more employees to disclose pay scales and benefits in job postings, as well as retain records of compliance with the amended law.
Employers may satisfy the requirement to disclose pay scales and benefits in job postings by including in its job postings a hyperlink to a public webpage listing the required disclosures. The law also extends to job postings for remote employees who report to a supervisor, office, or work site in Illinois, even if the employees physically perform work outside of Illinois. Internal promotion opportunities for Illinois-based and Illinois-reporting employees, too, are subject to the law. Employers must announce all promotion opportunities to current employees no later than 14 calendar days after publishing the position’s external job posting.
Even where employers engage a third party for job postings, the onus remains on the employer to ensure the job announcement contains the necessary disclosures. While the third party may be liable for failing to include the requisite information in the job posting, it may avoid liability by showing the employer did not provide it with the necessary information.
The law has equally robust record retention requirements and penalties for non-compliance. The law requires employers to maintain records of the pay scale and benefits for each position and job postings for five years.
The Illinois Department of Labor will assess a variety of penalties for non-compliant job postings based on whether the job posting is “active” at the time the Department issues a notice of violation. The law affords first-time offenders of an “active” posting a cure period of 14 days before assessing a fine of up to $500. Second-time offenders have a seven-day cure period before being subject to a penalty of up to $2,500. The law provides no grace period to recurrent offenders (three or more violations), who will be subject to a fine up to $10,000. For first-time offenders of a posting that is “not active,” the Department may impose a fine not to exceed $250. For second-time offenders, a fine of up to $2,500 may be assessed. And, third-time and subsequent offenders may be subject to a fine of up to $10,000. Whether or not a job posting is “active” is based upon a “totality of the circumstances,” including whether the position has been filled, the length of time the posting has been accessible to the public, the existence of a date range that a position is active, and whether the posting is for a position for which the employer is no longer accepting applications.
Despite its stringent requirements, the law also has some notable caveats. The law does not require an employer to make a job posting. Further, it does not prohibit an employer or employment agency from asking an applicant about their wage or salary expectations for the position for which they applied. This aligns with the Illinois’ Equal Pay Act’s other provisions prohibiting employers from inquiring into applicants’ salary histories but permitting employers to engage in conversations with applicants concerning salary expectations.
The law will take effect January 1, 2025 and will apply to job announcements posted after this effective date.
Illinois employers should begin to take steps to ensure they comply with the law’s mandates by the January 1, 2025 deadline and continue to monitor the proliferating salary transparency legislation throughout the country. Sheppard Mullin attorneys are here to navigate this evolving landscape and to help employers in their compliance efforts.
