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Illinois’ New Tool Against Discriminatory Pay: The No Salary History Law

Illinois’ New Tool Against Discriminatory Pay: The No Salary History Law

Governor Pritzker signed into law the No Salary History Law, which will advance equal pay in Illinois. The No Salary History Law will strengthen both the Federal Equal Pay Act and Illinois’ Equal Pay Act by prohibiting employers from inquiring about a job applicant’s past wages during the hiring process.

The No Salary History Law is aimed at ending the cycle of pay discrimination. Pay discrimination based on gender has been banned since the early 1960s in the U.S. and the Illinois Equal Pay Act of 2003, but years later, most women still earn considerably less than men performing the same or similar job.

The No Salary History Law Intends to Mitigate Pay Disparity

The new law tries to address the pay disparity by banning employers from asking job applicants how much they made in previous roles. Salary history questions are a major contributing factor in both racial and gender wage gaps. Compensation should not be based on past wages, but rather on a person’s skills, experience and the requirements of the job. Yet, many employers determine the salary of new hires based on their prior income. For minorities and women, the discriminatory pay differential from the prior job, may and oftentimes does, transfer to their new job. And, the cycle of discriminatory pay continues.

The Illinois No Salary History Law provides:

(b-5) It is unlawful for an employer or employment agency, or employee or agent thereof, to (1) screen job applicants based on their current or prior wages or salary histories, including benefits or other compensation, by requiring that the wage or salary history of an applicant satisfy minimum or maximum criteria, (2) request or require a wage or salary history as a condition of being considered for employment, as a condition of being interviewed, as a condition of continuing to be considered for an offer of employment, as a condition of an offer of employment or an offer of compensation, or (3) request or require that an applicant disclose wage or salary history as a condition of employment.

(b-10) It is unlawful for an employer to seek the wage or salary history, including benefits or other compensation, of a job applicant from any current or former employer. This subsection (b-10) does not apply if:

  1. the job applicant's wage or salary history is a matter of public record under the Freedom of Information Act, or any other equivalent State or federal law, or is contained in a document completed by the job applicant's current or former employer and then made available to the public by the employer, or submitted or posted by the employer to comply with State or federal law; or
  2. the job applicant is a current employee and is applying for a position with the same current employer.

(b-15) Nothing in subsections (b-5) and (b-10) shall be construed to prevent an employer or employment agency, or an employee or agent thereof, from:

  1. providing information about the wages, benefits, compensation, or salary offered in relation to a position; or
  2. engaging in discussions with an applicant for employment about the applicant's expectations with respect to wage or salary, benefits, and other compensation.

(b-20) An employer is not in violation of subsections (b-5) and (b-10) when a job applicant voluntarily and without prompting discloses his or her current or prior wage or salary history, including benefits or other compensation, on the condition that the employer does not consider or rely on the voluntary disclosures as a factor in determining whether to offer a job applicant employment, in making an offer of compensation, or in determining future wages, salary, benefits, or other compensation.

Illinois No Salary History law will go into effect on September 29, 2019. Prospective employees can seek up to $10,000 in damages if employers violate the law. It also protects the right of employees to discuss their salaries and benefits with co-workers.

Other Laws that Focus on Equality in Pay

The Federal Equal Pay Act of 1963, as an amendment to the Fair Labor Standards Act, "prohibit[s] discrimination on account of sex in the payment of wages by employers.” It requires that men and women who work in jobs that are substantively equal in terms of skill, effort, responsibility, and working conditions receive the same pay. The Federal Equal Pay Act permits differences in wages based on seniority, merit, quality, or quantity of production, or other differentials not based on gender.

Illinois’ Equal Pay Act, (820 ILCS 112 ), prohibits employers with four or more employees from paying unequal wages to men and women for doing the same or substantially similar work, except if the wage difference is based upon a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or factors other than gender. It also prohibits employers from paying African-American employees less than non- African-American employees for the same or substantially similar work. The Illinois Equal Pay Act will also be amended to change the language of equal pay for the same or substantially similar work on jobs which require ‘equal’ skill, effort, and responsibility and are performed under similar working conditions” to jobs that require ‘substantially similar’ skill, effort and responsibility and are performed under similar working conditions.

Illinois is not the Only State Limiting Inquiries into Salary History

More than 17 other states have laws aimed at ending discrimination in pay by limiting inquiries into salary history, including Alabama, California, Colorado (coming in 2020), Connecticut, Delaware, Hawaii, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Vermont, Washington and Wisconsin. Cities also have similar laws including Salt Lake City, Utah, Cincinnati, Ohio, Toledo, Ohio, Kansas City, Missouri, Louisville, Kentucky, New Orleans, Louisiana, and Jackson, Mississippi. Puerto Rico also has a similar law, but makes exceptions for voluntary pay disclosures and after-hire corroboration of pay history.

If you have any questions regarding hiring practices, contact Kristin Tauras at ktauras@mckenna-law.com. Ms Tauras focuses her practice on helping employers proactively comply with Illinois and federal employment laws and represents employers in employment litigation or workplace harassment matters.

Categories Employment Law General Litigation

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