A new Illinois state law now prohibits all employers, both public and private, from paying unequal wages to male and female employees for doing the same or substantially similar work on jobs the performance of which requires equal skill, effort, and responsibility and which are performed under similar working conditions. This new law, effective January 1, 2016, amends the Equal Pay Act of 2003.
The Illinois Equal Pay Act of 2003 expanded the federal Equal Pay Act of 1963, and allows individuals to bring civil actions against non-compliant employers to collect any underpayment of compensation. The Act also allows successful litigants to collect interest, costs, and attorney’s fees. Employers found to be in violation of the Act are also subject to civil penalties.
While the 2003 Equal Pay Act, as originally passed, only applied to employers with four (4) or more employees, the amended Act now covers all employers regardless of the number of employees they have.
The 2016 amendment also increased fines for violations of the Act and established a two-tier sanctioning regime. Now, employers with less than four employees who have been found in violation of the Act can receive fines not to exceed $500 for a first offense and fines up to $5,000 for third and subsequent offenses. Employers with four or more employees can receive fines not to exceed $2,500 for a first offense and fines up to $5,000 for third and subsequent offenses.
While these changes to the Equal Pay Act still allow employers to pay male and female employees different wages so long as their wage differences are based on seniority, merit, or another valid factor other than gender, to ensure compliance with the Act, employers should review their payroll practices to determine whether such legitimate factors are in fact responsible for any disparities in pay. Moreover, employers with less than four (4) employees should now be aware that they are covered by the Act and subject to wage discrimination litigation under Illinois state law.