Illinois Legislature Passes Bill Requiring Pay Scale Disclosures

By: Bill Osterndorf

On May 17, 2023, the Illinois legislature passed a bill requiring various pay scale disclosures in job postings. This bill, House Bill (HB) 3129, amends the Illinois Equal Pay Act. If HB 3129 is signed into law by Illinois Governor J.B. Pritzker, it will go into effect on January 1, 2025.

Job Postings 

HB 3129 requires employers to provide information on “pay scale and benefits” in job postings. “Pay scale and benefits” are defined as follows: 

"Pay scale and benefits" means 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…”

A position’s pay scale and benefits may refer to the 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. 

An employer can either provide pay scale and benefits information in each job posting or it can provide a hyperlink in each posting that directs job seekers to a website containing this information. When third parties make job postings on behalf of an employer, the third party must provide pay scale and benefits information in job postings or provide a hyperlink to that information. 

If an employer will consider current employees for an opening where external candidates are considered, the employer must make employees aware of the opening no later than 14 calendar days after there is an external job posting. Unlike some other pay transparency laws, HB 3129 has no specific provisions about providing pay scale and benefits information to employees who inquire about this information unless there is a job posting for an open position. 

Employers are not required to provide job postings for open postings. HB 3129’s provisions only become effective when there is a specific job posting made. 

Employers and Positions Covered and Preservation of Records 

HB 3129’s job posting requirements cover employers with 15 or more employees. The bill does not exempt employers outside of Illinois. There are two types of positions that are subject to HB 3129’s job posting requirements: 

• Positions where work will be physically performed, at least in part, in Illinois 
• Positions where work will be physically performed outside of Illinois, but the position reports to a supervisor, office, or other work site in Illinois 

Employers must retain the pay scale and benefits for each position as well as any job posting for a position for a period of five years. This conforms to other record retention requirements in the Illinois Equal Pay Act. 

Penalties for Failure to Provide Pay Scale and Benefit Information 

The Illinois Department of Labor (IDOL) is required to investigate any claim that an employer violated the provisions of HB 3129. An individual may bring a claim within one year after the date of the alleged violation. If IDOL determines a violation has occurred, it must notify the employer and provide an opportunity for the employer to cure the violation. 

HB 3129 establishes a sequence of penalties for employers that fail to provide pay scale and benefits information in active job postings.  

 
When a third offense occurs involving an active job posting, an employer will incur automatic penalties without a cure period for a period of five years. While HB 3129 does not explicitly state this, it appears that each penalty during this five year period may be for an amount not to exceed $10,000.

For job postings that are not active, there is a separate sequence of penalties. 

HB 3129 establishes various criteria for determining whether a job posting is active or not. 

Other Illinois Laws Regarding Pay 

Illinois has been very active in determining whether employers are providing appropriate pay protections to employees. In 2019, Illinois banned employers from screening out job seekers based on salary history. Employers are also banned from using salary history as a factor in “making an offer of compensation, or in determining future wages, salary, benefits, or compensation.” 

In 2021, Illinois passed amendments to the Equal Pay Act that require employers to provide pay data on Illinois employees. Employers contacted by IDOL must request an Equal Pay Registration Certificate (EPRC). To receive an EPRC, employers must provide pay data on Illinois based employees and submit a statement certifying compliance with various state and federal laws. 

HB 3129 has an unusual provision that interacts with Illinois’ ban on requesting salary history. The bill states that nothing “prohibits an employer or employment agency from asking an applicant about his or her wage or salary expectations for the position the applicant is applying for.” This means an employer may ask about salary expectations but must not ask about salary history or make decisions based on salary history.

Governments Enacting More Pay Laws 

Illinois is not unique in passing laws regarding pay. A growing number of states have laws requiring pay transparency. For example, the states of California and Washington specifically require that all job postings include a wage scale or salary range. Illinois is unusual in allowing employers to provide a hyperlink to pay scale and benefit information. There are also a growing number of laws banning requests for salary history. While Illinois is one of only a handful of states requiring employers to provide information on employee pay, more states are considering such laws. The European Union also recently adopted a directive for member states concerning both pay transparency and pay equity reporting. 

DCI will continue to closely follow the growing focus on pay that is occurring across the United States and around the world.