Illinois Lawmakers Pass Numerous Bills Affecting Employers

In a flurry of activity into the wee hours of June 2, 2021, Illinois legislators concluded a spring session that saw the passage of numerous measures that will affect employers in the state across the span of the employment relationship. Among the most significant of the many bills heading to Governor Pritzker for signature are acts amending the Artificial Intelligence Video Interview Act, the Equal Pay Act, the Victims’ Economic Security and Safety Act (“VESSA”), and the Freedom to Work Act. It is expected that Governor Pritzker will sign all of the above-mentioned bills.

Changes Affecting the Hiring Process

As we have previously explained, the State’s Artificial Intelligence Video Interview Act (“AIVIA”) requires employers using artificial intelligence (“AI”) enabled video interview technology during the hiring process to make certain disclosures to and obtain consent from applicants, and also includes privacy protection measures. Upon the Governor’s signature, the AIVIA will be amended to include new provisions that require some employers using AI-analysis during the screening process to collect and report demographic data. Specifically, if an employer relies solely on AI to make a threshold determination about whether an applicant will progress to an in-person interview, then that employer will be required to keep track of the race and ethnicity of (i) applicants who do not proceed to an in-person interview after screening and (ii) those applicants who are ultimately hired. Covered employers will need to prepare an annual report of demographic data collected during the twelve month period ending on November 30 of each year, to be submitted by December 31 to the Illinois Department of Commerce and Economic Opportunity (“DCEO”), which must then analyze the data and report by July 1 each year whether it revealed a racial bias in the use of AI. It is important to note that this change affects only those employers who rely solely upon an AI-enabled analysis of a video interview to screen potential candidates for in-person interviews. If enacted, the new provisions would take effect January 1, 2022.

Changes Affecting Equal Pay Act Compliance

Illinois employers should also take note of the upcoming changes to the state’s Equal Pay Act (the “Act”). These include new language that, notwithstanding the Act’s prohibitions on inquiries into a candidate’s salary history,  affirmatively permits employers to ,  request confirmation of information about an applicant’s unvested equity or deferred compensation, if the applicant has voluntarily and spontaneously given such information.

In addition, the legislature approved substantive amendments to the Act’s filing and certification requirements, some of which benefit employers. For example, the implementation of requirements for “covered employers” (described below) to certify their compliance with the Equal Pay Act has been delayed, and safeguards against bureaucratic error and zealous enforcement were added.

New Timelines and Procedures for Obtaining Equal Pay Registration

Under the Act’s revised Equal Pay Registration Certificate requirements, private employers with more than 100 employees in the State of Illinois that are required to file an Annual Employer Information report (EEO-1) with the United States Equal Employment Opportunity Commission (the “EEOC”) are considered “covered” and must comply with registration provisions of the Act. Here are key points to note:

• Covered employers (i.e., those with 100 or more Illinois employees as of March 23, 2021 that must file EEO-1 reports) must obtain an equal pay registration certificate (“EPRC”) from the Illinois Department of Labor (“IDOL”) by submitting an application for certification. The application period for those employers will be between March 24, 2022 and March 23, 2024. Thereafter, those employers must recertify every two years.
• Employers that obtained authorization to do business in Illinois after March 23, 2021 that are “covered” must submit an application for an EPRC within three years of commencing operations, but not sooner than January 1, 2024, and then must recertify every two years thereafter.

Safeguards for Covered Employers

Significantly, the amended legislation imposes duties upon the IDOL, including an obligation to collect contact information from each covered business and to assign businesses deadlines for their EPRC applications. The amendments expressly provide that the State’s failure to do so may be a mitigating factor in any determination that an employer violated the Act’s certification requirements. The amendment also gives employers an opportunity to cure the deficiencies and re-submit a deficient EPRC application, or to appeal the rejection of an application. The amendments also simplify the EPRC application and add important privacy protections to any individually identifiable information.

Changes to Penalties that May Be Imposed

Beneficially to employers, the amendments eliminate the potential civil penalty of 1% of a business’s gross profits, if an employer fails to comply. On the other hand, the amendments raises fines to up to $10,000 for any violation of the Act, including for inquiries into prior salary history, discriminatory wage practices, and retaliation.

Changes Affecting Victims’ Leave Rights

The Legislature approved amendments to the Victims’ Economic Security and Safety Act (“VESSA”), which provides an entitlement to victims of sexual or gender violence and domestic violence to job-protected leave. The amendments expand the definitions of relevant “crimes of violence” and persons qualifying as a “family or household member;” provide that an employee has the right to choose which form of documentation (if available) shall be submitted; and provide that an employer may not require or even request more than one document during the 12-month period during which VESSA leave is requested, if the requested leave is related to the same incident(s) or perpetrator(s). Further, the amendments add a new section to the law mandating the confidentiality of any information obtained by an employer pursuant to VESSA and prohibiting disclosure of any such information or documentation absent a written request or consent by the employee, unless otherwise required by law. Finally, the amendments provide that victims may not be barred from collecting voluntary leave benefits.

Changes Affecting Noncompetes and Nonsolicits

As we have reported in detail previously, the legislature also passed a comprehensive reform of Illinois law regarding non-competition and non-solicitation agreements. The law, which imposes certain due process protections for employees while also clarifying certain ambiguities in Illinois common law, will apply only to agreements entered into after January 1, 2022.  Please see our prior report information about what Illinois employers should do now to comply.

Additional “Heads-Up”

Despite the significant amount of legislation passed in the session, unfinished business remains. The legislature is expected to return in coming weeks to vote upon outstanding measures, including amendments to the Identity Protection Act and the Unemployment Insurance Act.

As always, we will keep you apprised of changes that affect employers, and welcome your questions.