Compensation Confidential

On September 29, 2019, a new amendment to the Illinois Equal Pay Act of 2003 went into effect which prohibits employers from asking about the past wages and compensation histories of job applicants. Employers will violate this new provision even if they do not require disclosure of the information, but encourage applicants to volunteer it. Businesses should act immediately to review and update their application materials to remove any questions or form fields related to compensation information, as well as train staff involved in hiring not to ask for the information in interviews. It is important to note that the new law covers all compensation information. Employers are barred from inquiring about arrangements for time off, insurance coverage, or any other benefit the applicant received in return for employment at their previous job.

In addition to the law’s broad coverage of compensation, it covers a broad range of job applicants. Individuals are protected from inquiries about past compensation whether they are seeking part-time, full-time, hourly, or salaried employment. The only type of applicant not covered are independent contractors. The law seeks to blind the employer to the applicants’ past compensation, so in addition to barring direct inquiries, employers are also prohibited from using recruiters to ask about past wages or from asking an applicant’s past employers.

The legislature’s goal was to protect the applicant’s right to privacy in his or her past compensation information from employers, therefore applicants are not liable if they bring up without provocation their past compensation. It would be wise for employers to discourage this sort of voluntary disclosure though, as the employer is still prohibited from considering the information when deciding whether to hire the applicant, what compensation to offer, or in determining future compensation and benefits.

Unlike most laws which go into effect at the start of the year, this change is effective as of September 29, 2019. Employers must comply with the law immediately to avoid penalties under it. If you are concerned about your business’s compliance with this new regulation or are interested in learning more about this matter, please contact Theodore M. McGinn at 847-705-5555 or tmcginn@lavellelaw.com.