Illinois employers with 15 or more employees will soon be required to openly share pay scales and benefits in job postings.
On January 1, 2025, amendments to Illinois’ Equal Pay Act of 2003 will take effect, placing new responsibilities on employers and employment agencies operating in the state. These changes are part of a broader push toward wage transparency and fairness, and they will impact how businesses recruit, retain, and compensate their workforce. In addition to pay scale and benefits disclosure, the law also strengthens recordkeeping requirements and outlines a new process for dealing with complaints.
Whether you’re a small local business or a larger multi-state operation, these new rules represent a shift in how you communicate with potential hires and engage with current employees. Let’s break down the key points.
A Closer Look At The New Requirements
Mandatory pay transparency in job postings
For employers with 15 or more employees, pay scales and benefits must be included in all specific job postings. This could be a wage or salary range, along with details about benefits like bonuses, stock options, health coverage, and other forms of compensation. Employers can reference a pay scale set by market data, internal pay ranges, or a previously established budget for the position.
Promotion postings for internal candidates
The law also requires employers to announce promotion opportunities internally no later than 14 days after making an external job posting. By doing so, the state aims to encourage fair, equitable access to advancement within organizations.
Recordkeeping obligations
Employers must maintain documentation on wages, job postings, and associated pay scales and benefits for five years. This ensures that if questions arise (from employees or regulators) you’ll have the records to show you’ve followed the rules.
Complaint and enforcement mechanisms
Employees, and in some cases job applicants, can file complaints if they believe there’s been a violation of the Equal Pay Act or the new requirements. The Illinois Department of Labor (IDOL) can investigate, and if it finds violations, issue penalties. These fines can escalate up to $10,000 for repeated offenses.
Why These Changes Matter
Promoting trust and fairness
Transparency around pay and benefits can build trust with both current employees and potential hires. It sends a clear signal that:
- You value fairness
- You have nothing to hide
- You’re committed to creating a level playing field
This sort of openness can translate into better employee morale, stronger retention, and a more attractive employer brand.
Staying ahead of regulatory trends
Illinois is not alone in pursuing pay transparency measures. Many states and jurisdictions are adopting similar requirements. Being proactive in Illinois may give you a head start if you operate or expand into other states with comparable laws. Beyond pure compliance, embracing transparency now shows that you’re on the cutting edge of best practices in HR and compensation management.
Avoiding financial risks
Non-compliance could result in significant penalties. Beyond that, there’s also the potential reputational damage. Employees and job candidates can easily learn about infractions that appear in public records. Being proactive helps shield you from such setbacks.
Practical Steps To Prepare
- Review and update pay scales
If you haven’t established formal pay scales or if your current ranges are outdated, now’s the time to get organized. Set clear criteria for determining pay ranges-consider market data, industry standards, and geographic factors. Document these criteria and ensure consistency.
- Examine your benefits offerings
The new law requires not just pay information, but also a “general description” of the benefits and other compensation offered for each position. Make sure you can clearly articulate what you provide, such as:
- Health insurance options
- Retirement plans
- Bonuses
- Paid time off (PTO)
- Other perks
Have a system to keep this information current as offerings evolve.
- Adjust your job posting processes:
Build compliance into your recruitment workflow. Before posting a job, confirm that the pay scale and benefits information is accurate and up to date. If you work with a third-party recruiter or job board, ensure they have the necessary details.
- Strengthen your recordkeeping:
of all job postings, pay ranges, benefits information, and employee wage data. Since you’ll need to retain this documentation for at least five years, consider implementing a reliable HR information system (HRIS) or leveraging an external partner to streamline these tasks.
Looking Ahead
As we approach January 1, 2025, the clock is ticking for Illinois employers to adapt. Navigating the new Illinois pay transparency requirements can feel overwhelming, especially when you’re already juggling countless HR responsibilities. That’s where Group Management Services (GMS) comes in. When you partner with GMS you get:
- Compliance guidance: We can help clarify the new Illinois requirements and show you how they fit into your current HR strategy.
- Efficient recordkeeping: We’ll help implement systems that keep all the necessary information at your fingertips, reducing stress when it’s time to prove compliance.
- Training and support: Need help educating your team or ensuring that your posting and promotion processes meet the new rules? GMS can provide the resources, tips, and best practices you need to ensure everything is aligned.
- Integrated payroll and benefits administration: GMS integrates payroll and benefits into a cohesive system. This integration ensures accurate pay data, easy updates to employee compensation, and clear, accessible benefits information for current and prospective employees.
Ready to prepare your business for Illinois’ upcoming law changes? Contact GMS today to learn how we can help you stay compliant and thrive in an evolving regulatory landscape.