Cook County Record

Tuesday, August 20, 2019

Attorneys: IL legislation banning salary history, other inquiries, could heighten employer liability

Lawsuits

By Karen Kidd | Jun 21, 2019


William R. Pokorny, a partner, and Brianne Dunn, an associate in Franczek P.C.'s Chicago office | Photos courtesy of Franczek

CHICAGO (Cook County Record) — Legislation recently passed in the Illinois General Assembly that would bar employers from asking job applicants for salary history and other information likely will trigger more Equal Pay Act claims, according to two labor and employment attorneys.

"Illinois Equal Pay Act claims are comparatively rare right now," said William R. Pokorny, a partner, and Brianne Dunn, an associate in Franczek PC's Chicago office, during a joint Cook County Record email interview. "There won't be an avalanche of new cases when the amendments take effect, 60 days after Gov. [J.B] Pritzker’s signature."

That probably will change, Pokorny and Dunn said.

"Over time, we do expect to see more of these claims and they will be harder and more expensive for employers to resolve than they currently are," the two attorneys said. "There will be some cases involving allegations of employers improperly asking for salary history information in the hiring process, but our sense is that the larger legal risk for most employers will arise from compensation processes that fail to deal with pay  disparities between existing employees who perform comparable work."

Pokorny practices in Franczek's labor & employment, K-12 education, and higher education groups and he co-chairs the firm's labor & employment practice group. Dunn practices in Franczek's education group, where she advises and represents K-12 education clients on education, labor and employment law.

House Bill 834, an amendment to the Illinois Equal Pay Act of 2003, would bar employers in the state from asking job applicants about wage, salary or benefits history. The legislation also would strengthen existing state pay equity and pay transparency protections.

The bill attracted 70 sponsors in the state House and Senate, including its lone Republican sponsor, Rep. David Welter (R-Morris).

HB 834 passed the Senate with 41 yeas, 14 nays and four abstentions May 22 and then the House with 93 yeas, 19 nays and four abstentions, largely -- but not sharply -- along party lines, with 20 Republicans in the House voting yea, 19 voting nay and four abstaining. In the state Senate, three Republicans voted Yea, 14 voted nay and two abstained.

HB 834 was sent to Gov. J.B. Pritzker for his signature June 6. Pritzker is expected to sign the legislation.

Although the legislation's prohibitions are getting most of the attention, employers will need to be wary of other HB 834 provisions, the attorneys said.

"While many employers will understandably focus on the new prohibition on compensation history inquiries, the more significant change in the new law may actually turn out to be the expansion of pay equity claims and narrowing of employer defenses," they said. "Employers will need to pay much more attention to how they deal with compensation, both at hire and after, to  avoid creating pay disparities that may be difficult to defend."

Employers also should update their hiring processes, Pokorny and Dunn added.

"Employers will, obviously, need to update their hiring processes to account for the new law," the two said. "Job applications that ask for compensation history will need to be updated. Everyone involved in the hiring process will need to understand how compensation can and cannot be discussed."

Employers also should update how they handle existing workers under the new legislation, the lawyers noted.

"They should also take a close look at their compensation practices for existing employees," the two said. "For example, lockstep systems that grant salary increases based on the prior year's compensation should be carefully scrutinized to ensure that they are not unintentionally perpetuating pay disparities. Employers should strongly consider having their lawyers oversee this analysis so that any potential problems can be addressed in the context of the attorney-client privilege."

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