By: Bill Osterndorf and Evan Szarenski
On January 6, 2023, the State of Illinois published final administrative rules regarding the Equal Pay Registration Certificate that employers must secure. The administrative rules had been published in proposed form in May of 2022. The final administrative rules provide guidance on what employers must do to secure an Equal Pay Registration Certificate (EPRC) under the Illinois Equal Pay Act.
The final administrative rules provide guidance on several critical terms used in the Act.
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- A “business” required to secure an EPRC “means any private employer who has 100 or more employees in the State of Illinois and is required to file an Annual…EEO-1 [Report]”
- A business is in “compliance” with the EPRC requirements if it has no final and unappealable rulings against it under the laws associated with the EPRC in the past two years, or if it has corrected any final and non-appealable rulings
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- An “employee” means “any person performing a service for a business…whose base of operations, or…the place from which the service is directed or controlled, is located within the State of Illinois" or who physically works is in the State of Illinois.
The definition of “employee” makes it clear that employees who report into operations in Illinois are included in the determination of whether an employer meets the threshold to file. These employees should then be included in statistical reporting.
The final administrative rules state for the first time that employers “shall” submit an enrollment form notifying the Illinois Department of Labor (DoL) that the employer is subject to the EPRC provisions of the Equal Pay Act. Previously, employers were encouraged to notify the department, but it is not clear that employers were under a mandate to do so. Employers can notify the department from the main Illinois DoL webpage.
The Illinois DoL will give each business a due date by which they must file an EPRC application. In the EPRC application, employers must provide data on wages paid to employees for the previous calendar year. The final administrative rules state that wages are to be reported “by either the mean hourly wage (for employees paid hourly wages) or annual mean wage (for salaried employees).” While this language suggests that employers are responsible for reporting only on base wages for employees, the Illinois DoL has an FAQ stating as follows:
19. What does "wages" mean for reporting purposes?
"Wages" means any compensation paid to an employee by an employer pursuant to an employment contract or agreement between the two parties, including wages, salaries, earned commissions, earned bonuses, stocks and ownership shares. "Wages" does not include the value of retirement benefits, health insurance benefits, or other fringe benefits.
This definition of wages matches the definition of wages referenced in the Equal Pay Act itself. Thus, it appears that “wages” for these purposes include more than just base wage.
The final administrative rules state that an EPRC may be suspended or revoked under various circumstances. One of these circumstances is where there are two or more violations of the statutes identified as associated with the EPRC, including the Illinois Equal Pay Act, Title VII, and the federal Equal Pay Act. The rules do not make an exception for situations where these violations have been corrected. This provision seems inconsistent with the earlier definition of “compliance” in the rules.
Under the final administrative rules, an employee may request anonymized data regarding the employee’s job classification or title and the pay for that title or classification. The rules provide parameters for submitting such as request to the Illinois DoL. If the request is granted, the Illinois DoL may provide up to 10 years of relevant data to the employee if the department has this data in its possession.
The final administrative rules do not specifically mention penalties associated with the failure to properly secure an EPRC; those penalties are found in the statutory language of the Illinois Equal Pay Act. The Equal Pay Act indicates that employers may be fined up to $10,000 for a violation of the EPRC sections of the statute. There may be additional adverse consequences for employers where average compensation for members of some race, ethnicity, or sex is found to “consistently below” the average for another group.
The State of Illinois’ next actions will likely be to update its FAQs to match the final administrative rules and to make the administrative rules available on the EPRC website. Employers subject to the reporting requirements of the EPRC should take the following steps:
- Register as a covered entity on the EPRC portal
- Consider how wage information will be reported to the Illinois DoL
- Review recent discrimination claims that have occurred under the Illinois Equal Pay Act, Title VII, the federal Equal Pay Act, and other laws associated with the EPRC to ensure there are no uncorrected final and non-appealable rulings
- Monitor communications from the Illinois DoL to see when the agency asks to have the EPRC submitted
DCI will continue to monitor developments in state pay laws and other industry updates.
