Illinois is the latest state to sign into law a salary history ban for employers.
The salary history ban is a component of HB 834 and amends the Illinois Equal Pay Act of 2003. The law went into effect last month and prohibits employers from inquiring into the salary history of prospective job candidates for determining salary and as a condition for employment consideration.
Additionally, the law states that employers cannot “discriminate between employees on the basis of sex by paying wages to an employee at a rate less than the rate at which the employer pays wage to another employee of the opposite sex for the same or substantially similar work on jobs the performance of which requires substantially similar skill, effort and responsibility.”
The law also prohibits employers from discriminating against African American employees by paying them less than employees who perform substantially similar work and are not African American.
Another component of the law includes the discussion of salary earnings among employees. The law states that it is “unlawful for an employer to require an employee to sign a contract or waiver that would prohibit the employee from disclosing or discussing information about the employee’s wages.”
The amended law now includes a number of associated penalties for violating the state’s Equal Pay Act. An employer that violates the law can have civil penalties as high as $5,000 assessed per employee. In addition, employees can recover damages incurred within five years, with special damages not to exceed $10,000.
The bill can be viewed by clicking here.
Employers with operations in the state of Illinois should ensure their hiring process is up to date and the appropriate parties are not seeking salary information from prospects as a part of the hiring process.
Illinois joins 16 states and 19 local governments that have passed similar salary history bans. Organizations can stay current with the growing list of salary history bans by visiting HR Dive’s tracker here. If your organization has operations in these states and cities, get prepared to comply with these salary history bans and other evolving equal pay laws as they surface.
As more state and federal governments are passing legislation to help close the gender wage gap, best practices include conducting a proactive pay equity audit to identify any pay disparities within your organization.
To learn more about achieving pay equity, click here.