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Illinois' New Pay Transparency Requirements: Department of Labor Releases Much-Needed Guidance For Employers

Of the many Illinois employment law changes that went into effect when the clock struck midnight on Dec. 31, 2024, the state’s new pay transparency law is perhaps the most impactful and involved for employers. Pursuant to an amendment to the Equal Pay Act of 2003 (the “Act”), all Illinois employers with 15 or more full or part-time employees (no matter where located) must include pay scale and benefits information in job postings as of Jan. 1, 2025. However, the language contained in the amendments left many questions unanswered for employers, creating uncertainty as to what exactly they needed to include in postings and other steps they needed to take to ensure compliance.

To provide employers with some much-needed pay transparency clarity, in Dec. 2024, the Illinois Department of Labor (IDOL) published both a brief employer fact sheet as well as extensive guidance in the form of FAQs.

Employers should review both documents to familiarize themselves with their pay transparency obligations and work with experienced counsel to audit and modify their hiring practices as necessary to comply with these new requirements. That said, the following are highlights of IDOL’s recently released guidance:

Pay Scale and Benefits Information Required In Covered Postings

  • Employers are not required to post any or all job opportunities. However, if a covered employer chooses to post a specific job opportunity that is covered by the Act, that posting must include pay scale and benefits information.
  • “Posting” a job opportunity is not limited to formal advertisements. It includes any “notices or publications” for a specific employment opportunity. So, even if an employer is sending an informal email to a personal network, stating that they are seeking candidates for an opening, that email could be considered a posting subject to the disclosure requirements.
  • “Pay scale and benefits” information that must be included in postings by covered employers means:
    • The anticipated wage or salary, or the wage or salary range, and a general description of the benefits and other compensation, including, but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position.
    • The employer may refer to any applicable internal pay scale, the previously determined pay range for the position, the actual pay range of others currently holding equivalent positions, or the budgeted amount for the position, as applicable, when setting the anticipated wage or salary and benefits for the posted position.
    • A range’s bottom and top should not include open-ended phrases like “$40,000 and up” with no top of the range, or “up to $60,000” with no bottom. 
  • Instead of setting forth pay scale and benefits information in the body of a posting, an employer may instead include a hyperlink to a publicly viewable internet page that contains that information, so long as it specifies the pay scale and benefits for the particular position in question.

Positions/Postings For Which Pay Scale and Benefits Information Must Be Provided

  • Pay transparency obligations apply to all notices or publications for a specific employment opportunity that (i) will be physically performed, at least in part, in Illinois or (ii) will be physically performed outside of Illinois, but the employee reports to a supervisor, office, or other work site in Illinois.
  • Pay transparency requirements do not apply to a business that posts a “Help Wanted” sign on its physical premises or website, as no specific position or job title is identified in the posting.
  • Pay transparency requirements apply to internal-only job postings as well as those made externally. For example, an employer's company-wide email to all employees about a particular position opening, or a physical notice posted in a room for current employees’ break, would constitute a “job posting.”
  • A third party may be held liable under the Illinois Equal Pay Act if it fails to include the pay and benefits information in the posting it makes on the employer’s behalf unless the third party establishes that the employer did not provide the pay transparency information.

Mandatory Disclosure and Recordkeeping Requirements

  • A covered employer or employment agency must disclose to an applicant for employment the pay scale and benefits to be offered for the position prior to any offer or discussion of compensation and at the applicant's request if a public or internal posting for the job, promotion, transfer, or other employment opportunity has not been made available to the applicant. This is true even if the candidate came to the employer via a third party engaged by the employer. 
  • For no less than five years, a covered employer must make and preserve records that document the name, address, and occupation of each employee, the wages paid to each employee, the pay scale and benefits for each position, and the job posting for each position.

If you have questions or concerns about these changes to the law or your pay transparency obligations as an employer generally, please reach out to your contact at Latimer LeVay Fyock for assistance.