Employers with workers in Illinois....a new law you need to be familiar with regarding equal pay!

Expanded Protections for Workers Under the Illinois Equal Pay Act

On August 14, 2009, Governor Pat Quinn signed House Bill 3634 (HB 3634), amending the Illinois Equal Pay Act. HB 3634 went into effect immediately. The new legislation expands two different time limits related to the filing of claims, and increases the time that records must be kept.

The Illinois Equal Pay Act prohibits employers with four or more employees from paying unequal wages to men and women doing the same or substantially similar work, requiring equal skill, effort, responsibility and under similar working conditions, subject to certain exceptions. It protects both men and women from pay disparity. Furthermore, it protects any individual who files an equal pay complaint from harassment or retaliation. If an employer is found to have engaged in unlawful pay discrimination, it will be required to pay the employee the wage difference plus possible legal costs and civil fines of up to $2,500 per violation.

An employee or former employee may file a complaint with the Illinois Department of Labor alleging a violation of the Equal Pay Act. Under HB 3634, the time for filing a complaint with the Illinois Department of Labor has increased from 180 days after the date the employee learned of the violation to one year from the date of underpayment.

An employee or former employee may also pursue an equal pay claim in court. Under HB 3634, the time for filing a claim in court has increased from three years after the date the employee learned of the underpayment to five years from the "date of underpayment." HB 3634 also makes clear that a "date of underpayment" is triggered each time wages are underpaid, consistent with the Lilly Ledbetter Fair Pay Act of 2009.

The recordkeeping requirements of the Equal Pay Act have also changed. In general, an employer must maintain records that document the name, address, and occupation of each employee and the wages paid to each employee. Employers are now required to keep these records for five years, as opposed to the three year period that applied under the prior version of the law. In addition, employers must maintain records related to an ongoing investigation or enforcement action until their destruction is authorized by the Illinois Department of Labor or by court order.

The most significant of these changes for most employers is the expanded record retention obligation. Employers in Illinois should review their record retention policies, especially those related to compensation, justification for compensation decisions, job descriptions, performance evaluations, disciplinary records and other documents related to individual compensation decisions. It is even more important that these documents be retained, and preserved for a minimum of five years.