Illinois Ban on Employers’ Inquiry or Consideration of Salary History Takes Effect

October 4, 2019

Recent amendments to the Illinois Equal Pay Act became effective Sept. 29, 2019. Illinois employers are now prohibited from seeking or inquiring about a job applicant’s wage or salary history with any current or former employer. Even if applicants voluntarily disclose their wage or salary history, employers are prohibited from considering such information when making employment or compensation decisions.

Despite these restrictions, the amended statute carves out a few exceptions. Employers may seek a job applicant’s wage or salary history if such information is publicly available or considered public record under the federal or state Freedom of Information Act. Employers may also discuss with job applicants their expectations with respect to compensation and benefits as well as provide job applicants with information regarding the compensation and benefits of particular job positions. If the job applicant is an internal candidate applying for a different position with the same employer, then the employer may both inquire and consider the applicant’s current compensation when making any employment or compensation decision.

The purpose of this amendment was to address what many believe to be a culprit behind the gender wage gap. Illinois now joins a group of over a dozen states that have passed some form of restriction on employers inquiring about a job applicant’s wage or salary history. At the federal level, the 9th U.S. Circuit Court of Appeals ruled in 2018 that, under the federal Equal Pay Act, “prior salary alone or in combination with other factors cannot justify a wage differential” between female and male employees. The U.S. Supreme Court vacated the 9th Circuit’s decision because the author of the majority opinion passed away before the 9th Circuit issued the opinion. Nonetheless, the reasoning of this ruling may be adopted by the 9th Circuit or other courts in the future.

In addition to banning wage or salary history inquiries, the amended Illinois Equal Pay Act prohibits employers from requiring employees to sign a contract restricting them from disclosing or discussing their compensation or benefits with third parties. The only employees whom employers can contractually require to maintain confidentiality of wage information are supervisors, human resources employees and any other employee with access to other employees’ wage or salary information. This is largely consistent with the U.S. National Labor Relations Board’s position that federal law prohibits employers from banning their employees from discussing their wages and benefits or engaging in other “concerted activities.”

Under the amended statute, aggrieved employees and applicants have a private cause of action against employers who violate these new requirements and may recover in a civil action their actual damages, special damages up to $10,000, injunctive relief and attorneys’ fees. The statute of limitations to bring such an action is five years from the date of the violation. The Illinois Department of Labor is also authorized to pursue legal action and may seek a civil penalty of up to $5,000 for each violation and for each employee affected.

To comply with these new requirements, Illinois employers should review their employment applications, recruiting questionnaires and other documents provided to job applicants or prospective employees to ensure they do not include any prohibited inquiries. Employers should also train their managers involved in the recruitment and interview process on how to discuss with applicants their salary expectations without running afoul of Illinois Equal Pay Act requirements.

For more information on this topic, please contact the authors, your McGuireWoods contact or a member of the firm’s labor and employment group.