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Illinois Set to Enact New Limitations on Criminal History Consideration for Employment Decisions and Equal Pay Requirements

By: Jonathan Ksiazek

On March 23, 2021, Governor Pritzker signed Illinois Senate Bill 1480, titled the Employee Background Fairness Act, into law. SB 1480 contains three new provisions that will impact employers in Illinois effective immediately.

The first big change for employers in SB 1480 involves additional steps when evaluating job applicants who have a criminal record. SB 1480 amends the Illinois Human Rights Act to require employers to determine whether there is either a substantial relationship between the conviction and the position sought. This evaluation must include a consideration of whether the employment position offers the opportunity for the same or a similar offense to occur and whether the circumstances leading to the conviction will recur in the employment position. The determination further must consider whether the granting of employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the public. SB 1480 describes several factors employers must consider in making this determination.

Under SB 1480, if an employer determines that they will not be able to hire an individual based on their criminal record, the employer must give notice to the affected individual, engage in an interactive process, and consider information provided by the applicant about why the conviction should not be considered or be dispositive. This meeting must take place before a final decision is made to disqualify the applicant. In event that the employer disqualifies a candidate based on their criminal record after this meeting, it must provide additional information to the employee regarding the reasons for its decision.

Next, SB 1480 amends the Business Corporation Act to require each domestic or registered foreign corporation required to file an EEO-1 report with the Illinois Secretary of State to document the gender, race, and ethnicity of the corporation’s employees as part of its corporate reporting obligations. The Secretary of State will publish the gender, race, and ethnicity data of each corporation’s employees on the Secretary of State’s website. Employers will have to meet this new obligation starting on January 1, 2023.

Lastly, SB 1480 will require private employers with more than 100 employees to obtain an “equal pay registration certificate.” To obtain this certificate, an employer must provide the gender, race, and ethnicity data of its employees to the Illinois Department of Labor as well as the total wages paid to each employee during the prior calendar year.

The employer also must submit a statement signed by a corporate officer, legal counsel, or other authorized agent for each county in which the business has a facility or employees representing that a) The business is in compliance with Title VII, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act, and the Equal Pay Act of 2003; b) the average compensation for its female and minority employees is not consistently below the average compensation of its male and non-minority employees within each of the major job categories reported, accounting for certain factors; c) the employer does not restrict employees of one sex to certain job classification and makes retention and promotion decisions without regard to sex; d) wage and benefit disparities are corrected when identified; and e) the employer evaluates wages and benefits to ensure compliance with relevant statutes.

An employer who does not obtain a certificate or whose certificate is suspended or revoked after an IDOL investigation is subject to a mandatory civil penalty equal to 1% of “gross profits.” Existing corporations must obtain certificates within three years after the effective date of SB 1480 while new corporations must obtain certificates within three years after commencing operations. Recertification is required every two years.

DiMonte & Lizak, LLC will continue to monitor new employment law developments in Illinois as they arise.

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