Illinois has joined the wave of jurisdictions passing pay transparency requirements. On August 11, 2023, Illinois Governor J.B. Pritzker signed a bill into law that will require employers to include pay ranges in job postings beginning in 2025.
Quick Hits
- Illinois Governor J.B. Pritzker signed into law pay transparency legislation that will require employers with at least fifteen employees to include in job postings the “pay scale and benefits” that employers reasonably believe they will pay for the positions.
- The law will apply to jobs performed at least in part in Illinois as well as jobs where the employee will report to a supervisor, office, or other work site in Illinois.
- The law will go into effect on January 1, 2025
House Bill (HB) 3129 amends the Illinois Equal Pay Act of 2003 to require employers with at least fifteen employees to include in job postings the “pay scale and benefits” meaning “the wage or salary, or wage or salary range, and a general description of the benefits and other compensation… that the employer reasonably expects in good faith to offer for the position.”
The signing comes after the HB 3129 passed both houses of the Illinois state legislature in May 2023. The law applies to positions that “will be physically performed, at least in part, in Illinois” or will be performed outside the state but the “employee reports to a supervisor, office, or other work site in Illinois.” It will take effect on January 1, 2025.
HB 3129 defines “benefits and other compensation” to include but not be limited to “bonuses, stock options, or other incentives.” Pay scales are to be set by reference to “any applicable pay scale, the previously determined range for the position, the previously determined range for the position, the actual range of others currently holding equivalent positions, or the budgeted amount for the position, as applicable.”
According to the law, employers may satisfy the pay transparency requirements by including a “hyperlink to a publicly viewable webpage that includes the pay scale and benefits.”
If employers use a third party to post jobs, the employer must provide the pay scale and benefits to the third party, which must include that information in the post for the position or a hyperlink to the information. That third party will be liable for the failure to include the pay scale and benefits in job postings, “unless the third party can show that the employer did not provide the necessary information.”
The law will further require employers to notify current employees of all “opportunities for promotion” within fourteen calendar days of posting externally for the position, “except for positions in the State of Illinois workforce designated as exempt from competitive selection.”
The law will not require employers to make a job posting nor will it prohibit employers from asking job applicants about their wage or salary expectations for the job.
The Illinois Department of Labor (IDOL) will be empowered to initiate investigations regarding compliance with HB 3129’s requirements either at its discretion or upon receiving a complaint from an individual alleging to be aggrieved by a violation within one year of the alleged violation.
Next Steps
HB 3129 comes as a growing number of jurisdictions across the country—including California, Colorado, New York City, New York State, and Washington—have passed pay transparency bills with similar requirements. A similar federal bill has also been proposed in Congress. Still, the Illinois bill does not take effect until January 1, 2025. Employers in the state may want to consider reviewing their internal and external job posting policies and their arrangements with third parties that make postings on their behalf in light of the new laws upcoming requirements.
Ogletree Deakins’ Chicago Office and Pay Equity Practice Group will continue to monitor developments and will provide updates on the Illinois and Pay Equity blogs.
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