April 19, 2022
Illinois law requires large employers to report certain payroll information as part of the state's Equal Pay Act registration process
Under SB 1847, enacted in 2021, the Illinois Equal Pay Act of 2003 (EPA) was amended to require that employers (except public employers) with more than 100 employees report certain payroll information to the Illinois Department of Labor (IDOL) as part of the EPA registration/certification process.
According to the IDOL's announcement, the new requirement will take effect March 24, 2022.
When registration and certification is required
Covered businesses authorized to transact business on or before March 23, 2021 must submit an application to obtain an EPA registration certificate between March 24, 2022 and March 23, 2024. Covered businesses authorized to transact business after March 23, 2021 must submit an application to obtain an EPA registration certificate within three years of commencing business, but not later than January 1, 2024. Affected entities should note the following:
- IDOL will notify businesses, at least 120 days in advance, when it is time for them to register.
- Businesses are required to recertify every two years.
- A filing fee of $150 applies.
- Businesses with 100 or fewer employers are exempt from the registration requirement; however, they are required to submit an application to obtain an EPA registration certificate when their workforce reaches or surpasses 100.
Information employers must provide
For certification purposes, employers must provide the following to the IDOL:
- Wage records. Any business that is required to file an annual Employer Information Report EEO-1 with the Equal Employment Opportunity Commission must also submit to the IDOL a copy of the business's most recently filed Employer Information Report EEO-1. The business must also compile a list of all employees during the past calendar year, separated by gender and the race and ethnicity categories reported in the business's most recently filed Employer Information Report EEO-1, including the county in which the employee works, the date the employee started working for the business, any other information the IDOL deems necessary to determine if pay equity exists among employees, and the total wages paid to each employee during the past calendar year, rounded to the nearest $100.
- Equal Pay Compliance Statement. Under SB 1847, each applicable business is required to submit a statement signed by a corporate officer, legal counsel or authorized agent of the business certifying:
- that the business is in compliance with this Act and other relevant laws, including but not limited to: Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, and the Equal Wage Act;
- that the average compensation for its female and minority employees is not consistently below the average compensation, as determined by rule by the United States Department of Labor, for its male and non-minority employees within each of the major job categories in the Employer Information Report EEO-1 for which an employee is expected to perform work, taking into account factors such as length of service, requirements of specific jobs, experience, skill, effort, responsibility, working conditions of the job, education or training, job location, use of a collective bargaining agreement, or other mitigating factors;
- that the business does not restrict employees of one sex to certain job classifications, and makes retention and promotion decisions without regard to sex;
- that wage and benefit disparities are corrected when identified to ensure compliance with the law;
- how often wages and benefits are evaluated; and
- the approach the business takes in determining what level of wages and benefits to pay its employees; acceptable approaches include, but are not limited to, a wage and salary survey.
The law provides that violations of the state's EPA by employers having 100 or more employees can be up to $10,000 per employee for violations other than EPA certificate requirements plus a $10,000 penalty for violations of the EPA certificate requirements.
More information about the Illinois EPA is available here.
Ernst & Young LLP insights
California legislation was also enacted that requires employers of 100 or more employees must report pay and hours-worked data by establishment, job category, sex, race, and ethnicity to the Department of Fair Employment and Housing (DFEH) annually. This reporting is required under Government Code section 12999 enacted in SB 973. The report is due annual by March 31 for the preceding year.
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