Important Update: The IEPA amendments will take effect January 1, 2025, not the date previously stated.

Following a growing trend, on August 11, 2023, Illinois became the latest state to enact legislation related to pay transparency by amending the Illinois Equal Pay Act (IEPA). One week earlier, Illinois also amended the Illinois Day and Temporary Labor Services Act (IDTLSA) to include provisions requiring equal pay for equal work, as well as other safety related protections for temporary workers dispatched by staffing agencies to client-employer worksites. 

Pay Transparency

The IEPA amendments, which take effect on January 1, 2025, require all Illinois employers with at least fifteen (15) employees to include information regarding the “pay scale and benefits” for a position in any job posting. “Pay scale and benefits” is defined in the IEPA as the, “wage or salary, or the wage or salary range, and a general description of the benefits and other compensation, including, but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position,” which pay scale and benefits should be, “set by reference to any applicable pay scale, the previously determined range for the position, the actual range of others currently holding equivalent positions, or the budgeted amount for the position, as applicable.” 

The law applies to all positions that, “will be physically performed, at least in part, in Illinois, or will be physically performed outside of Illinois, but the employee reports to a supervisor, office or other work site in Illinois.”

While the law does not require an Illinois employer to post jobs, if an employer chooses to do so, either on its own or through a third party, the pay scale and benefits information must be included. Employers and third parties can satisfy the pay scale and benefits posting requirements by including the information directly in the actual posting, or by including a hyperlink to a page on the employer’s website that provides such information. Additionally, the law requires employers to notify its current employees of all “opportunities for promotion” within fourteen (14) calendar days of posting the position in a public forum.

Employers must maintain records related to the job postings for a minimum of five (5) years, in addition to the already existing provisions requiring that records documenting the name, address, and occupation of each employee, and the wages paid to each employee be maintained.

The Illinois Department of Labor enforces the IEPA and violations of the job posting amendments will result in a fine “not to exceed $500” for the first offense, $2,500 for a second offense (after a seven day cure period), and $10,000 for a third and subsequent offenses (no cure period).

Equal Pay for Temporary Workers

The IDTLSA amendments took effect immediately, with the Illinois Department of Labor issuing emergency rules related to same on August 7, 2023. The pay transparency amendments to the IDTLSA require that eligible temporary workers (defined as those who work for the employer for at least ninety (90) days within a twelve (12) month period, either consecutively or intermittently) dispatched by a staffing agency to a client-employer receive the same or greater rate of pay and benefits as the lowest paid directly hired employee of the client-employer. For purposes of the IDTLSA, “benefits” are defined as, “health care, vision, dental, life insurance, retirement, paid and unpaid leave, other similar employee benefits, and other employee benefits as required by state or federal law.” In lieu of providing the actual benefits, staffing agency employers may pay temporary employees the hourly cash equivalent of such benefits.

The equal pay required under the IDTLSA amendments must be paid to current temporary workers assigned to employer worksites no later than November 12, 2023 (ninety days after the effective date of the amendments) or on the ninetieth (90th) day of such temporary worker’s employment, whichever is earlier.

The IDTLSA amendments also include additional requirements for staffing agencies related to the safety and health practices of their client-employers, including a requirement that staffing agencies provide their employees with general awareness safety training in the employee’s preferred language. The IDTLSA amendments require the client-employer to provide written confirmation of any known or anticipated safety hazards of the position(s) and/or worksite to the staffing agency, confirm that the staffing agency’s general safety training was adequate, and to provide the temporary worker with job specific safety training upon such temporary worker starting the assignment at the client-employer’s worksite.

Trends and Next Steps

As of the posting of this article, California, Connecticut, Colorado, Hawaii, Maryland, Nevada, New Jersey, New York, Ohio, Rhode Island, and Washington all have pay transparency laws on their books already, while Michigan and Oregon have bills pending in their respective legislative branches. The new wave of pay transparency requirements are geared to bolster equal pay laws that have been in effect for decades, but which have proven to be woefully ineffective in securing the equal pay for equal work that such equal pay laws stand for. In March of this year, the federal government got on board when the Salary Transparency Act, which would amend the federal Fair Labor Standards Act, was introduced in Congress. If enacted, the Salary Transparency Act would require disclosure of pay ranges in all internal and public job postings in addition to requiring disclosure of the pay range to all applicants prior to discussing compensation.

Employers who are not operating in one of the above listed states should be prepared to publish their compensation and benefits information, or at minimum, be willing to share such information with potential candidates. In anticipation of the same, employers will want to analyze whether their compensation offerings, including benefits, are in line with industry standards.

We will continue to monitor the various state and federal pay transparency and related laws and provide updates as necessary. If you have questions about your specific state pay transparency proposed or enacted laws, please contact Maureen A. Maffei or any member of Ice Miller’s Workplace Solutions Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.