Illinois Enacts New Restrictions for Considering Criminal History in Employment Decisions and Equal Pay Requirements

Employment law changes regarding human rights and equal pay have arrived in Illinois.  On March 23, 2021, Governor J.B. Pritzker signed into law S.B. 1480, which makes significant amendments to both the Illinois Human Rights Act (IHRA) and the Illinois Equal Pay Act (IEPA), effective immediately.

Criminal Conviction Record and Employment

S.B. 1480 amends the IHRA with more limitations on how an employer may use an employee’s or applicant’s criminal conviction record when making employment decisions. It is now a civil rights violation for any employer to use a criminal conviction record as a basis to refuse to hire, terminate, or take any other adverse employment action against the applicant or employee with two exceptions:

1. There is a “substantial relationship” between one or more of the previous criminal offenses and the employment sought or held; or
2. By granting or continuing employment, an “unreasonable risk” would exist “to property or to the safety or welfare of specific individuals or the general public.”^[1]

To determine whether a substantial relationship exists, an employer should consider whether the employment position “offers an 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.”^[2]

The new law also requires an employer to consider the following relevant factors when making this determination:

1. Length of time since the conviction;
2. Number of convictions on record;
3. Nature and severity of the conviction and its relationship to the safety and security of others;
4. Facts or circumstances surrounding the conviction;
5. Age at the time of the conviction; and
6. Evidence of rehabilitation efforts.^[3]

If it is determined that a substantial relationship or unreasonable risk exists, the employer must engage in an interactive process with the applicant or employee before taking an adverse employment action such as terminating an employee or not hiring an applicant. The employer must first notify the individual in writing of the intent to terminate or not hire the individual and provide the individual with a copy of the conviction history report. The individual is entitled to five business days to submit a response.

After five business days, whether or not a response is provided, the employer may take adverse employment action by providing the individual with written notice which contains: (1) an explanation of the basis for the determination or refusal to hire; (2)  internal procedures for appealing the determination; and (3) notice of the individual’s right to file a Charge of Discrimination with the Illinois Department of Human Rights.

Potential liability for violating these amendments is the same as for other violations of the IHRA, including reinstatement or hiring, back pay, compensatory and punitive damages, and the employee’s or applicant’s legal fees, costs, and litigation expenses.  To help ensure compliance with these new amendments, Illinois employers should review their current policies and procedures for utilizing criminal background checks.

Equal Pay Registration Certification

S.B. 1480 amends the IEPA by adding new provisions that require private sector employers with over 100 employees in Illinois to file an “equal pay registration certificate” every two years with the Illinois Department of Labor (IDOL).  To obtain this certificate, a covered employer must apply by paying the filing fee and submitting an equal pay compliance statement to the IDOL Director. The statement must include: (1) a copy of the most recent EEO-1 report filed with the EEOC for each Illinois county in which the business has a facility or employees; (2) a list of all Illinois employees during the past calendar year by gender, race, and ethnicity categories; and (3) the total wages paid to each Illinois employee during the last calendar year rounded to the nearest hundred dollar.^[4]

As part of the equal pay compliance application, a covered employer must also submit a statement declaring:

• 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;
• Average compensation for its female and minority employees is not consistently below the average compensation for its male and non-minority employees within each major job category while recognizing legitimate factors that justify pay differentials;
• The employer does not restrict employees of one sex to certain job classifications and retention and promotion decisions are not made based on sex;
• When identified, wage and benefit disparities are corrected for compliance with applicable federal and state laws;
• The frequency of evaluations of wages and benefits to ensure compliance with the law; and
• The basis on which the business sets compensation and benefits as set forth in the amendment.[5]

If a covered employer fails to obtain an equal pay registration certificate or the certificate is revoked by the IDOL after an investigation, the employer is subject to a penalty of 1% of the business’ gross profits.

For further questions, please do not hesitate to reach out to our employment law team at Danna McKitrick, P.C.

Posted by Attorney Katherine M. Flett. Flett is a member of the litigation team whose primary focus is on assisting clients in insurance defense, business litigation, employment law, and bankruptcy matters.

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^[1] 775 ILCS 5/2-103.1(A)

^[2] 775 ILCS 5/2-103.1(A)

^[3] 775 ILCS 5/2-103.1(B)

^[4] 820 ILCS 112/11(c)(1)

^[5] 820 ILCS 112/11(c)(1)