Illinois Enacts SB 1480

The Illinois Human Rights Act (IHRA) and the Illinois Equal Pay Act became law on March 23, 2021, when the governor signed Senate Bill 1480. This bill requires that employers report EEO-1 and pay data to the Secretary of State of Illinois and limits an employer’s ability to consider criminal history in their hiring decisions. Altogether, this law presents a considerable liability to employers in hiring and requires a substantial effort to comply.

This law limits the use of criminal conviction records by employers by drawing out the employment process in an attempt to give people that were involved in the criminal justice system a better chance of obtaining a job. The law restricts employers from using criminal records to disqualify an applicant from a job unless the employer shows that the conviction is significantly related to the job and has participated with the applicant in an interactive process.

Additionally, employers who are required to file an EEO-1 report with the Equal Employment Opportunity Commission (EEOC) must include information that is similar to the employment data in section D of the business’s EEO-1 form in their annual corporate report to the Illinois Secretary of State. This information includes data about the gender, ethnicity, and race of their employees.

Finally, the Act requires private businesses that employ more than 100 people to acquire an Equal Pay Registration Certificate. This is obtained from the Illinois Department of Labor after the employer provides the total wages they paid to each employee for the previous calendar year and their employees’ gender, ethnicity, and race.

SB 1480 amends the Illinois Human Rights Act to add significant restrictions on an employer’s ability to consider criminal convictions. The IHRA bans employers from taking adverse employment action against an employee for reasons of sex, race, ancestry, national citizenship status, marital status, sexual orientation, pregnancy, color, religion, military status, age, gender identity, national origin, ancestry, physical or mental disability, or order of protection status.

SB 1480 amends the IHRA immediately to extend protection to people with a criminal conviction record by banning employers from using their criminal conviction record to disqualify or take adverse action in employment issues unless the following conditions apply.

  • There is a substantial relationship between the position being applied for and the criminal offense.
  • Employing the person would cause an unacceptable safety risk to any property or person.

When considering whether there is a substantial relationship, the employer needs to consider whether the position would allow a potential employee to commit the same type of offense or put the person in a position that is likely to lead to similar behaviors. If either of these situations apply, the employer can decide to disqualify the applicant from the job.

When employers are determining whether there is a substantial relationship between the position being considered and a person’s criminal record, they are required to consider any mitigating factors, such as:

  • The number of convictions in the person’s record
  • The length of time since the conviction occurred
  • The severity and nature of the conviction and how it relates to the security and safety of other people
  • The circumstances and facts of the conviction
  • The age of the potential employee at the time the conviction occurred as well as any rehabilitation that might have taken place

If an employer does decide to disqualify an individual, the employer must provide the individual with written notice of the employer’s preliminary employment decision. This written notice must identify any conviction or convictions that the employer used to make this decision, as well as a copy of the criminal history report and the required information explaining the person’s right to respond to the notice and give any mitigating information they choose to provide before the decision is final. Disqualified individuals are required to be given five business days with which to respond to the written notice.

If an individual does respond to the employer, and the employer still decides to disqualify the person based on their criminal record, the employer is required to:

  • Inform the individual in writing of their final decision
  • State which convictions were the reason for the final decision along with the reasoning used in making the decision
  • Inform the individual of any procedures they can take to challenge the decision
  • Informed the individual of their right to file a charge 

Employers can find FAQs on the IDHR website that could be used as a compliance guide to help them with this new Act.

The Illinois Business Corporation Act has been amended by SB 1480. The Illinois Business Corporation Act requires that any registered foreign corporation or domestic corporation that currently is obligated to file an EEO-1 report with the Equal Employment Opportunity Commission must also include information that is similar to the employment data that is reported under the requirements of section D of a corporation’s EEO-1 form in their annual corporate report to the Illinois Secretary of State. Then, within 90 days of this report being filed, the Secretary of State will publish the reported data provided by these corporations on their employees pertaining to ethnicity, gender, and race. This requirement will apply to any annual reports filed by corporations on or after January 1st, 2023.

SB 1480 will also amend the equal pay act of 2003. It will require any public sector employers that employ more than 100 employees in Illinois to get an Equal Pay Registration Certificate from the Illinois Department of Labor. This must be done within three years of the effective date of SB 1480.

To get this certificate, any covered employers need to supply a copy of their EEO-1 report as proof of the total wages that they’ve paid to each employee throughout the previous calendar year. The definition of wages used in this amendment is the same broad definition of wages that applies in Section 2 of the Illinois Wage Payment And Collection Act. Employers covered by this amendment are required to obtain re-certification every two years from the Illinois Department of Labor.

This amendment is intended to eliminate illegal, discriminatory compensation differences that are due to race, ethnicity, or gender by making sure that the average compensation received by minority or female employees is not regularly less than the average compensation of any nonminority or male employees that are in the same job category on the EEO-1 report after taking into account any job-related factors.

There are also whistleblower protections and audit provisions in the amendment to the Equal Pay Act. The Act also levies a civil penalty that is 1% of any non-compliant gross profits of the employer. The Illinois Department of Labor has been directed to release more guidance to employers on this amendment in the near future.

These amendments significantly impact how employers can perform hiring. Failing to comply with these changes may result in audits and severe penalties. It is essential to work with a screening company you can trust to remain up to date with these changes and consult legal counsel whenever you are in doubt concerning your hiring, onboarding, and EEO-1 policies.