Following a growing trend across the nation, on May 17, 2023, the Illinois House of Representatives passed a bill (previously approved by the Illinois Senate) that would make Illinois the 5th US state to require pay transparency in employee recruitment. The bill now heads to Governor Pritzker, who is expected to sign it into law.
If signed, HB3129 would amend the Equal Pay Act of 2003 to require employers with at least 15 employees to include the pay scale and benefits for a position in any specific job posting. Employers will be able to satisfy their obligations by including a hyperlink to a publicly viewable webpage that includes the necessary information. If an employer uses a third-party to publish its postings, the employer must relay the pay scale and benefits to the third party, who then becomes liable for failure to include the details in the posting.
“Pay scale and benefits” is defined in the bill to mean 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, 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.
Employers will not be able to avoid the requirements of the new law by simply declining to advertise job openings. Under the bill, if an employer does not publish a job posting, it is required to tell an applicant the pay scale and benefits to be offered for the position prior to any offer or discussion of compensation and at the applicant's request. In addition, the proposed law obligates covered employers to publish opportunities for promotion to all current employees within 14 days after the employer makes an external job posting for the position.
The amendment only applies to positions that are physically performed, at least in part, in Illinois or are physically performed outside of Illinois, but for which the employee reports to a supervisor, office, or other work site in Illinois.
The bill also includes an anti-retaliation provision that prohibits covered employers from refusing to interview, hire, promote, or employ, or otherwise retaliating against an applicant for exercising their rights.
Any person aggrieved by a violation of the proposed law would be able to file a claim with the Illinois Department of Labor (IDOL). If the IDOL determines that a violation exists, it will provide the employer a 14-day opportunity to fix the job posting, after which it may impose a fine of up to $500 for the first offense. For a second offense, the cure period falls to 7 days and the maximum fine increases to $2,500. For a third offense, there is no cure period and the max penalty increases to $10,000.
While a first offense may be either a single job posting or multiple job postings identified at the same time, second and third offenses are single, violative job postings. In other words, after a first offense, each individual post carries its own potential penalty, even if the posts are copies published through separate means (ie, the same post on LinkedIn and Indeed). The proposed law also imposes potential fines for inactive job posts that violate the requirements, though the law would not apply retroactively.
Illinois employers (and those outside of Illinois that have employees that perform work or report to others in the state) should keep track of the pending law and be prepared to revise job postings if the bill is signed into law. If signed by Governor Pritzker, the proposed law does not become effective until January 1, 2025.
