On March 23, 2021, Illinois Governor Pritzker signed into law SB1480.  As discussed below, the law makes significant changes to the Illinois Human Rights Act (IHRA), the Illinois Equal Pay Act (IEPA) and the Illinois Business Corporation Act, aimed at curtailing employer use of conviction records, imposing new reporting and registration requirements concerning employee demographics and pay, and creating new whistleblower anti-retaliation protections. The amendments take effect immediately.

The Illinois Human Rights Act

SB 1480 amends the IHRA to make it a civil rights violation for an employer to use a conviction record as a basis to refuse to hire, to segregate or to act with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or terms, privileges or conditions of employment unless: there is a substantial relationship between one or more of the previous criminal offenses and the employment sought or held; or the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.

To determine whether a “substantial relationship” exists, employers must consider whether the employment position offers the opportunity for the same or a similar offense to occur and whether the circumstances leading to the conduct for which the person was convicted will recur in the employment position.  Employers must also consider the following factors in evaluating the “substantial relationship” or risk to property or safety factors noted above: the length of time since the conviction; the number of convictions that appear on the conviction record; the nature and severity of the conviction and its relationship to the safety and security of others; the facts or circumstances surrounding the conviction; the age of the employee at the time of the conviction; and evidence of rehabilitation efforts.

If, after considering the mitigating factors, the employers makes a preliminary decision that the employee’s conviction record disqualifies the employee, the employer is required to notify the employee of this preliminary decision in writing.  The notification must contain: notice of the disqualifying conviction(s) that are the basis for the preliminary decision and the employer’s reasoning for the disqualification; a copy of the conviction history report; and an explanation of the employee’s right to respond to the notice of the employer’s preliminary decision before that decision becomes final.  The notice must also inform the employee that the response may include, but is not limited to, submission of evidence challenging the accuracy of the conviction record that is the basis for the disqualification or evidence of mitigation, such as rehabilitation.

The employee is then allowed at least 5 business days to respond to the notification.  The employer must consider any information submitted by the employee before making a final decision.  If an employer makes a final decision to disqualify or take an adverse action solely or in part because of the employee’s conviction record, the employer shall notify the employee in writing of the following: notice of the disqualifying conviction(s) and the employer’s reasoning of the disqualification; any existing procedure the employer has for the employee to challenge the decision or request reconsideration; and the right to file a charge with the Illinois Department of Human Rights.

The Illinois Business Corporation Act

Beginning January 1, 2023, corporations that are organized under Illinois law and that are required to file an Employer Information Report EEO-1 with the EEOC must now include in their annual report to the State of Illinois information that is substantially similar to the employment data reported under Section D of the corporation’s EEO-1 report.  The Secretary of State will then publish data on the gender, race, and ethnicity of each corporation’s employees on the Secretary of State’s website.

The Illinois Equal Pay Act

The IEPA was amended to require private businesses with more than 100 employees to obtain an “equal pay registration certificate” by March 23, 2024, and every two years thereafter.  To apply for the certificate, the business must submit a filing fee, an equal pay compliance statement, a copy of the employer’s most recent EEO-1 report, and report the total wages paid to each employee during the past calendar year.  The equal pay certification will certify that:

  • The business is in compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the IHRA, the Equal Wage Act and the IEPA;
  • The average compensation for its female and minority employee is not consistently below the average compensation for its male and non-minority employees within each of the major job categories in the Employer’s EEO-1 report, taking into account factors such as length of service, requirements of specific jobs, experience, skill set, effort, responsibility, working conditions of the job, or other mitigating factors;
  • The business does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex;
  • Wage and benefit disparities are corrected when identified to ensure compliance with the laws referenced above; and
  • Wages and benefits are evaluated to ensure compliance with the laws referenced above, as well as the frequency of any such evaluations.

The employer must also indicate on its equal pay compliance statement whether, in setting compensation and benefits, it utilizes: a market pricing approach; state prevailing wage or union contract requirements; a performance pay system; an internal analysis; or an alternative approach to determine what level of wages and benefits to pay its employees.

The Illinois Department of Labor (IDOL) can impose a penalty on any business in an amount equal to 1% of the business’s gross profits if: the business does not obtain an equal pay registration certificate; or the business’s equal pay registration is suspended or revoked after an investigation by the IDOL.  In addition, the issuance of a registration certificate by the IDOL does not constitute a defense against any IEPA violation and also does not constitute a basis to mitigate damages.

New Whistleblower Anti-Retaliation Protections

The IEPA was also amended to prohibit a business from taking any retaliatory action against an employee because he or she: discloses or threatens to disclose to a supervisor or to a public body an activity, inaction, policy or practice implemented by the business that the employee reasonably believes is in violation of a law, rule, or regulation; provides information to or testifies before any public body conducting an investigation, hearing, or inquiry into any violation of a law, rule or regulation by a nursing home administrator; or assists or participate in a proceeding to enforce the provisions of the IEPA.

An employee claiming retaliation must show that the alleged protected activity was a “contributing factor” in the alleged retaliatory action.  The employer can avoid liability if it demonstrates by clear and convincing evidence that it would have taken the same unfavorable personnel action in the absence of that conduct.  A prevailing employee may be awarded reinstatement, double back-pay with interest and reasonable costs and attorneys’ fees.

Conclusion

Illinois employers should review their current policies for compliance with these amendments.  We will continue to monitor and report developments relating to this law.

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers.  Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven has served on Law360’s Employment Editorial Advisory Board and is a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

Photo of Edward Young Edward Young

Edward “Eddie” C. Young is a senior counsel in the Labor & Employment Law Department and a member of the following Firm practice groups: Restrictive Covenants & Trade Secrets; Discrimination, Harassment & Title VII; and Whistleblowing & Retaliation.

Eddie represents employers in all…

Edward “Eddie” C. Young is a senior counsel in the Labor & Employment Law Department and a member of the following Firm practice groups: Restrictive Covenants & Trade Secrets; Discrimination, Harassment & Title VII; and Whistleblowing & Retaliation.

Eddie represents employers in all aspects of employment law, with a concentration on litigating complex employment disputes of all types before federal and state courts throughout the country, the U.S. Equal Employment Opportunity Commission, state and local human rights commissions and arbitral tribunals (e.g., FINRA and AAA).  In particular, Eddie has successfully litigated employment-related disputes alleging breach of non-compete agreements, theft of trade secrets, discrimination, sexual harassment, whistleblower retaliation, wage and hour violations, including employee misclassification claims, breach of contract, defamation, fraud and other business-related torts.  Eddie has obtained a world-wide injunction to enforce a client’s non-competition restriction on a former executive, successfully defended a client through summary judgment and appeal against retaliation claims brought by a former General Counsel, represented Fortune 500 companies in defense of high-profile harassment claims associated with the #metoo movement, and provided representation to several professional sports leagues.  He also has significant appellate experience, including successfully representing clients before the U.S. Circuit Court of Appeals for the First, Second and Seventh Circuits, as well as before the United States Supreme Court.  Eddie often draws on his litigation experience to help clients avoid the courtroom by effectuating positive change in the workplace through impactful training, counseling and developing robust employment policies.

Working in a wide range of industries, Eddie represented clients in food services, financial services, medical devices, telecommunications, higher education, sports, retail, real estate and others.

Eddie has been recognized as “One to Watch” by Best Lawyers in America since 2021 and as a “Rising Star” by Super Lawyers since 2017. He also regularly advises clients, writes and speaks on cutting-edge legal issues, including the use of Artificial Intelligence in the workplace, and legal issues arising from the collection and use of employee biometric information.

Eddie maintains an active pro bono practice, including on-going representation of a certified class of approximately 65,000 visually disabled Chicagoans in litigation challenging the City’s lack of accessible pedestrian crosswalks.  Eddie is also a member of the Firm’s Pro-Bono Committee and is a three-time recipient of the Firm’s “Golden Gavel” award for his significant pro bono contributions.

Prior to joining Proskauer, Eddie was a cum laude graduate from Loyola University Chicago School of Law. He also obtained a Master’s Degree in Human Resources and Industrial Relations from Loyola University Chicago Graduate School of Business. He began his practice at a national management-side employment law firm, and has also worked in the corporate human resources department of a national tax consulting firm and as a Fellow with the Illinois Human Rights Commission.

Photo of Dakota D. Treece Dakota D. Treece

Dakota is an associate in the Labor and Employment Law Department and a member of the Employment Litigation & Arbitration Group. She regularly defends employers in single-plaintiff actions involving discrimination, harassment and retaliation claims under statutes such as Title VII and the Americans…

Dakota is an associate in the Labor and Employment Law Department and a member of the Employment Litigation & Arbitration Group. She regularly defends employers in single-plaintiff actions involving discrimination, harassment and retaliation claims under statutes such as Title VII and the Americans with Disabilities Act, as well as under various Illinois state laws. She has handled such cases before state and federal courts, the U.S. Equal Employment Opportunity Commission, the Illinois Department of Human Rights, and the Illinois Department of Labor. In addition, Dakota conducts employment-related investigations.

Dakota also provides day-to-day counseling to employers to heighten compliance and minimize the risk of litigation.  Her counseling focuses on issues related to hiring and firing, personnel policies and leave and accommodation requests. She also has experience drafting employee handbooks and company policies. Dakota is a frequent contributor to Proskauer’s Law and the Workplace blog.

While in law school, Dakota served as a law clerk at the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW), where she worked on a variety of labor relations issues. She also was a member and published author in the DePaul Law Review.