Jan 29, 2016

Recent changes to Illinois laws: expansion of Equal Pay Act

Among the more than 200 new Illinois laws that took effect in the new year is the legislation that amended the state’s Equal Pay Act.

The Equal Pay Act, which was originally passed in 2003, formerly applied to employers with four (4) or more employees; but, effective January 1, 2016, the Act was expanded to prohibit all employers from paying unequal wages to male and female employees for doing the same or substantially similar work.

The Equal Pay Act allows individual employees to bring civil actions to collect the amount of any underpayment of compensation, plus interest, costs and attorney’s fees. Employers are also subject to civil fines. The new changes also impose increased fines on a two-tiered basis: employers with less than four employees can receive fines not to exceed $500 for a first offense, up to $5,000 for third and subsequent offenses; employers with four or more employees will be subject to fines not to exceed $2,500 for a first offense, increasing up to $5,000 for third and subsequent offenses.

Under the Equal Pay Act, no employer may discriminate between employees on the basis of sex by paying wages at a rate less than the rate it pays to another employee of the opposite sex for 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. Therein lies the rub. Employers cannot equalize compensation by reducing the wages of any other employee. But, employers may defend claims under the Act by providing evidence that the positions at issue are demonstrably different: making detailed job descriptions important in the defense of these claims.

There are also specific statutory exceptions. Differences in compensation based on a seniority system, merit system, quantity/quality of production, or differentials based on any factor other than sex or categories protected by the Illinois Human Rights Act, are defenses to claims as to Equal Pay Act violations.

Of course, this is merely a summary. You should consult with an employment attorney at Chuhak & Tecson should you have any questions regarding the Equal Pay Act, or other employment related laws that may affect your business. 

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client Alert authored by: Daniel J. Fumagalli, Principal