Illinois Department of Labor Provides Guidance to Pay Transparency Requirements

Seyfarth Synopsis: On November 22, 2024, the Illinois Department of Labor (IDOL) posted long awaited guidance in the form of Frequently Asked Questions (FAQs) to respond to inquiries the Department has received regarding amendments to the Equal Pay Act. The FAQs seek to address questions that have puzzled employers seeking to comply with the amendments. The FAQs are located here, while the notable insights are summarized below.

Background

As we previously reported, on January 1, 2025, Illinois will require greater transparency in both the job opportunities available in the state as well as the pay ranges for those jobs. Employers with 15 or more employees must disclose “pay scale and benefits” in all job postings. The required disclosures include the wage or salary, or wage or salary range, as well as a general description of benefits and other forms of compensation the employer expects to offer for the position. It will also require announcing, posting, or otherwise making known all opportunities for promotion to current employees no later than 14 calendar days after making an external job posting for the same position. Moreover, the amendments impose a five year record keeping requirement to  maintain records of job postings for at least five years.

The Illinois Department of Labor is responsible for overseeing the enforcement of these amendments and is authorized to adopt rules necessary to administer and enforce provisions of the law. The recently issued FAQs provide much needed insight into how the IDOL, as the enforcement agency, will interpret and seek to enforce the amendments. To date, the FAQs are the only additional guidance available for employers as proposed rules have not yet been released.

Pay and Benefits Information

In its FAQs, IDOL detailed the acceptable form of pay disclosures. For instance, it is unacceptable, when providing a range, to include open-ended phrases such as positions will pay “$40,000 and up” or “up to $60,000.” And common phrases like “pay starts at $50,000 depending on experience” is likewise too vague to comply with the Act. Furthermore, if the pay scale is different for Illinois versus non-Illinois applicants, the posting must describe the relevant Illinois range. Further considering geography, the IDOL explained that if pay varies by local area within Illinois and “the employer has one or more sites in Illinois, the posted pay must be included for the site(s) in question.”

As for the question of how to properly describe benefits, the Department explained only that employers must describe at least the “nature of the benefits and what they provide” but employers need not provide “specific details, terms and conditions, or dollar values.”  Also, the Department has clarified that a “general description of benefits that the employer may provide” to employees does not satisfy its requirements under the Act. The Department “intends to provide more guidance” in the coming months, but for now, encourages employers “to consider all possible benefits” in their disclosures.  

Employers may meet their pay transparency obligations by directing applicants to hyperlinks or publicly available internet pages to disclose the pay scale and benefits as long as it specifies the relevant pay scale and benefits “for the particular position in question.”

Postings Requiring Pay Transparency Disclosures

The guidance reiterates that the pay transparency requirements apply only to positions that (1) will be performed, at least in part, in Illinois, or (2) will be performed outside of Illinois if the hired employee will report to a supervisor, office or other work site in Illinois. No consideration will be made and no exceptions will be made for part-time employment opportunities; the Act will apply equally to both full-time and part-time job postings.

Furthermore, the Department clarified that the requirements will not apply to a business who “posts a ‘Help Wanted’ sign on its physical premises or website” because no specific position or job title is identified. Though, for candidates who request pay and benefit information despite there being no specific job posting, the employer must disclose the information upon request.

Of further note, the Department confirmed that the transparency requirements apply equally to internally and externally posted job opportunities. Even if a posting is only listed internally, an employer must still disclose the pay scale and benefits. This includes company-wide emails about a “particular position opening” or any “physical notice” posted.

Out-of-State Employers and Employees

As mentioned, the amendments require disclosures for positions that will be performed, at least in part, in Illinois. For employers without operations in Illinois, the Act will not apply unless they had a “reason to know or reasonably foresee at the time it made” the posting that the work would be done “at least in part, in Illinois.”

Similarly, employers have expressed concern that even occasional or intermittent travel to Illinois would result in liability under the Act. However, the FAQs clarify that employers will not be subject to the pay transparency requirements due to a position’s “occasional, intermittent, or sporadic visits to or contact with Illinois for work.”

New Recordkeeping Requirements

The amendments require employers to retain records relating to the “pay scale and benefits for each position, the job posting for each position, and any other information the Director may by rule deem necessary and appropriate.” In its FAQs, the IDOL provides a non-exhaustive list of records that would “likely” be important to make and retain for this purpose, including the following:

• If an employer engaged a third party, that it included pay and benefit information in the materials provided to the third party;
• when and by what means an employer (directly or via engaged third party) published a specific job posting, whether external or internal-only;
• when and by what means an employer that externally published a specific job posting (directly or via engaged third party) made the promotional opportunity known to its current employees;
• when and how an employer in good faith determined the pay/range and benefits used in a job posting; and
• the good-faith reason for the change if the employer ultimately offered different pay and benefits than those specified in the job posting.

Determining “Active” Versus “Inactive” Job Postings

The financial penalties imposed on an employer for violating the Act differs based on whether the allegedly violative postings are active or inactive. The Department’s FAQs specify that it will determine whether a posting is “active” or not by considering the “totality of the circumstances.” Of note, the Department clarified it will look to:

• whether a position has been filled;
• the length of time a posting has been accessible to the public;
• the existence of a date range for which a given position is active, and
• whether the violating posting is for a position for which the employer is no longer accepting applications.

Job Postings Not Required

It's FAQs likewise remind employers that the amendments do not require job postings. Nor does the Act prevent an employer from recruiting or promoting a specific candidate or employee for employment or promotion without posting the opportunity. Rather, if an employer elects to post for an opportunity, the posting must include the required pay and benefits information and comply with the associated recordkeeping requirements.

 

 

Seyfarth’s Pay Equity Group is continuing to monitor this area for additional updates and is available to assist employers with navigating these new requirements and the ongoing trend toward greater pay transparency. For additional information, we encourage you to contact the authors of this article, a member of Seyfarth’s Pay Equity Group, or any of Seyfarth’s attorneys.