Illinois Enacts Equal Pay Certification & Reporting

At a Glance

• Pay data reporting begins January 1, 2023, and employers must obtain an equal pay registration certificate by March 24, 2024.
• Employers with 100 or more employees in Illinois must submit a statement of equal pay compliance, their EEO-1, a list of employees with their total wages, and a $150 application fee to the IL DOL.
• Recertification must be completed every 2 years.

Update: Additional legislation was passed changing the initial application period to March 24, 2022 until March 23, 2024. Employers will be contacted by the agency when they are required to file.

Introduction

Illinois Governor J.B. Pritzker signed Senate Bill 1480 (SB 1480), which amends the multiple state laws including the Illinois Equal Pay Act (IEPA). SB 1480 implements new requirements for employers. The bill does not add any protected categories to the IEPA.

New Requirements

Private employers with 100 or more employees within the state of Illinois must submit a statement of equal pay compliance, their EEO-1, a list of employees with their total wages, and a $150 application fee to the IL DOL.

Pay data reporting begins January 1, 2023, and employers must obtain an equal pay registration certificate by March 24, 2024. Recertification must be completed every 2 years.

 The IL DOL will not deny issuance of a certificate to a business unless the required information is not provided on their application and the IL DOL will issue a certificate within 45 days. A penalty of 1% of gross profits will be assessed for failing to obtain an equal pay registration certificate.

EEO-1 Data

Employers will also be required to submit their EEO-1 Report, including gender, race, and ethnicity. The report must be provided to the Illinois Department of Labor along with a valid equal pay registration certificate.  The Secretary of State will publish the data on the gender, race, and ethnicity of each corporation’s employees on the Secretary of State’s official website within 90 days of receipt.

Employee data

Employers must also provide a list of all employees during the past calendar year, separated by gender and the race and ethnicity categories to the IL DOL for certification and report the total wages as defined by Section 2 of the Illinois Wage Payment and Collection Act paid to each employee during the past calendar year, rounded to the nearest hundred dollars.

Filing Fee and Compliance Statement

In addition, there is a $150 filing fee and businesses must submit a statement of compliance with state and federal equal pay laws, signed by an officer or agent, to the Department of Labor for certification.

 The statement must state:

• That the business is in compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage act, and the Equal Pay Act of 2003 (the acts).
• That the average compensation for its female and minority employees is not consistently below the average compensation, as determined by rule by the United States Department of Labor, for its male and non-minority employees within each of the major job categories in the Employer Information Report EEO-1 for which an employee is expected to perform work under the contract.
• That the business does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex.
• That wage and benefit disparities are corrected when identified to ensure compliance with the Acts.
• How often wages and benefits are evaluated to ensure compliance with the Acts.

The statement must also include how the business determines compensation and benefits and whether it utilizes:

• a market pricing approach.
• State prevailing wage or union contract requirements
• a performance pay system.
• an internal analysis
• an alternative approach to determine what level of wages and benefits to pay its employees. The business must provide a description of its approach.

Next Steps

Employers should review their pay practices to prepare for the future filing.  As any additional details become available, we will provide additional updates.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner.

This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor