Pay transparency laws are gaining momentum across the United States, and Illinois is set to join this movement with significant changes coming in 2025.

These laws aim to promote fairness and equity in the workplace by ensuring that jobseekers have access to salary information before they apply for positions.

In this article we'll explore the new pay transparency requirements in Illinois, their implications for employers and employees, and what you need to know to prepare for these changes.

Overview of Pay Transparency Laws in Illinois

On August 13, 2023, Illinois Governor J.B. Pritzker signed an amendment to the Illinois Equal Pay Act (IEPA), which will take effect on January 1, 2025.

This amendment mandates that employers with 15 or more employees must disclose pay scales and benefits in all job postings. The goal is to create a more transparent hiring process and help close the wage gap that often affects women and minorities.

Key Requirements

Starting in 2025, job postings must include:

• Wage or Salary Information: Employers must provide either a specific wage or salary or a salary range for the position.
• Benefits Description: A general description of benefits, including bonuses, stock options, or other incentives that may be offered.

These requirements apply not only to jobs performed in Illinois but also to remote positions where employees report to an Illinois-based supervisor or office. If an employer uses third-party platforms for job postings, they must ensure that these platforms include the required pay information as well.

Implications for Employers

Employers need to prepare for these new regulations well in advance. Here are some critical steps they should consider:

• Review Job Posting Practices: Employers must evaluate their current job posting practices and ensure compliance with the new requirements.
• Determine Pay Scales: Establishing reasonable salary ranges based on market data will be essential. This may involve conducting pay audits to identify any existing disparities.
• Training for Hiring Managers: Training sessions should be organized for hiring managers and human resources personnel to familiarize them with the new laws and ensure they understand how to implement them effectively.

Enforcement and Penalties

The Illinois Department of Labor (IDOL) will oversee compliance with these new requirements.

Employers found in violation of the law may face penalties ranging from $500 for a first offense up to $10,000 for repeated violations. Importantly, employers will have a grace period of 14 days to correct any violations after being notified by IDOL.

Benefits of Pay Transparency

The introduction of pay transparency laws has several potential benefits:

• Promotes Fairness: By making salary information accessible, these laws aim to reduce wage disparities based on gender, race, or other factors.
• Informed Job Seekers: Candidates can make better-informed decisions about job applications based on salary expectations.
• Encourages Open Dialogue: Transparency can foster a culture of honesty and openness within organizations regarding compensation.

What Employees Should Know

For jobseekers and current employees in Illinois, these changes represent a significant shift in how compensation information is shared. Here’s what employees should keep in mind:

• Access to Pay Information: Starting in 2025, applicants can expect to see salary ranges included in job postings. This information can help them negotiate better offers.
• Requesting Pay Information: If an internal position is not publicly posted but is available for promotion, employees can request pay scale information before discussing compensation.
• Understanding Benefits: Alongside salary information, employees will also gain insights into the benefits offered by employers, allowing them to evaluate total compensation packages more effectively.

Preparing for Change

As we approach January 1, 2025, both employers and employees should take proactive steps:

1. Employers:
   • Start preparing now by reviewing existing job postings and updating them with required pay information.
   • Conduct audits of current pay practices to identify any discrepancies that need addressing before the law takes effect.
2. Employees:
   • Stay informed about your rights under the new law.
   • Use this opportunity to negotiate your salary based on transparent pay scales when applying for jobs.

Illinois is making great moves!

Illinois’ upcoming pay transparency law marks an important step toward creating a fairer job market.

By requiring employers to disclose pay scales and benefits in job postings, the state aims to empower workers with the information they need to make informed career choices.

As we move closer to 2025, both employers and employees should prepare for these changes to ensure compliance and take full advantage of the opportunities presented by greater transparency in compensation practices.