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Jul 6, 2021

Do You Have a Record? From Conviction History to EEO-1 Reports, Illinois Imposes New Requirements on Employers

ABSTRACT: Thinking about DQ'ing a potential hire due to a prior conviction? Think again.  Illinois employers better listen up, and look to the newly enacted employment law (known as Senate Bill 1480).  Key changes in the law deal with protections to employees and potential hires with criminal convictions, as well as new requirements for employers on providing information to State agencies regarding demographics and payroll data.

Every year, it seems as though the Illinois legislature imposes more and more requirements on employers for the protection of employees, and 2021 is no exception. This spring, Governor J.B. Pritzker signed into law amendments to the Illinois Human Rights Act (IHRA), the Illinois Business Corporation Act, and the Illinois Equal Pay Act under Senate Bill 1480. The new law provides protections to individual with criminal convictions, and adds requirements on employers to report employee demographic and payroll information to the Illinois Secretary of State.

As a refresher, the IHRA protects employees from discrimination and harassment on the basis of sex, race, color, national origin, religion, age, etc. in the workplace. Now, the IHRA protects employees (and potential employees) with criminal convictions. In essence, employers are now restricted from using an individual’s criminal record to disqualify an individual from employment or act adversely against an individual with a criminal record unless: (1) there is a substantial relationship between the criminal offense and the employment position sought or held; or (2) an unreasonable safety risk to a person or property exists. The test to determine whether a “substantial relationship” exists requires the employer to consider “whether the employment position offers an opportunity for the same or similar offense to occur” or whether circumstances exist that would lead to similar conduct

Factors that must be considered by the employer when determining if there is a “substantial relationship” or “unreasonable safety risk” include: (1) the amount of time that has passed since the conviction; (2) the number of convictions the individual has; (3) the nature and severity of the conviction in conjunction with the safety and security of others; (4) the facts and circumstances regarding the conviction; (5) the employee’s age when convicted; and (6) evidence regarding the individual’s rehabilitation efforts. 

If it is determined that a “substantial relationship” exists or there is an “unreasonable safety risk,” the employer may preliminary disqualify the individual from employment based on the conviction. If disqualified, the individual must receive written notice of the decision, which should include the conviction that disqualified the individual, the conviction history report obtained by the employer, and information for the individual to respond to the employer’s position on disqualification. The employer must provide the individual with five business days to respond to the written notice.

If the employer decides to stand on the disqualification after receiving the individual’s response, the employer is required to do the following: (1) provide the individual with its final decision regarding the disqualification in writing; (2) state the conviction that led to the disqualification, including the reasoning behind the decision; (3) inform the individual of any other avenues the individual can take to challenge the employer’s decision (if applicable); and (4) advise the individual of his or her right to file a charge of discrimination with the Illinois Department of Human Rights (IDHR).

Not only does the new law amend the IHRA, but it also amends the Illinois Business Corporation Act. In essence, the amendment provides that corporations are required to provide substantially similar information that is contained in EEO-1 reports to the Illinois Secretary of State. This requirement is for those corporations that are required to submit an EEO-1 report with the EEOC. Corporations who are required to provide this information in annual reports must include this information beginning January 1, 2023.

To ensure females and minorities receive compensation that is not consistently below the wages of white males, the new law amends the Illinois Equal Pay Act of 2003, which requires non-public employers with more than 100 employees to obtain an “equal pay registration” certificate from the Illinois Department of Labor (IDOL) on or before March 23, 2024. To obtain a certificate, employers need to provide an EEO-1 report to the IDOL, as well as proof of all wages paid to its employees over the prior year. Employers covered by this amendment are required to obtain a recertification every two years after its first submission. This amendment to the Equal Pay Act also provides protections to whistleblowers and the imposition of civil penalties against employers who do not comply with the certification requirements.

Undoubtedly, these new amendments impose additional burdens on employers and subject employers to additional liability. Conformance with these new laws is critical to ensure that employers are not subject to penalties or liability under the IHRA and the Equal Pay Act.