Illinois’ New Pay Transparency Requirements: What Staffing Agency Owners Need to Know

09 / 2024 | Laws and Regulations

 

As of January 1, 2025, Illinois employers, including staffing agencies, are set to face a significant shift in employment practices with the introduction of new pay transparency requirements under the amended Illinois Equal Pay Act (IEPA). This legislative change mandates that job postings must include the wage or salary range and a general description of benefits for any position that will be performed, at least in part, within Illinois or for positions outside Illinois but reporting to a supervisor or office within the state. Here’s what staffing agency owners need to understand about these requirements and the potential impacts on their operations:

 

Key Requirements:

• Pay Scale Disclosure: Every job posting must now detail the wage or salary range expected for the position. This includes not just the base pay but also benefits like bonuses, stock options, or other incentives.

 

• Benefit Descriptions: A general outline of benefits must accompany the salary information, providing transparency on what employees can expect beyond their base salary.

 

• Internal Promotional Opportunities: Employers are required to announce, post, or otherwise make known all opportunities for promotion to current employees no later than 14 calendar days after making an external job posting for the same position.

 

• Record Keeping: Employers are required to maintain records of the pay scale and benefits information for each position, as well as copies of job postings, for at least five years.

 

Potential Penalties for Non-Compliance

Staffing agencies and other employers who fail to comply with Illinois’ pay transparency requirements may face significant penalties. The Department has the authority to launch investigations either in response to complaints from affected individuals or on its own initiative. Complaints regarding violations of the pay scale and benefits disclosure must be filed within one year from the date of the alleged violation.

 

If the Department confirms a violation, it will notify the employer with specifics about the breach, the corresponding penalties, and a deadline by which the employer must rectify the situation. The severity of the penalties depends on whether the job postings in question are still active when the Department issues its notice and if the employer has committed similar violations in the past.

 

The Illinois Department of Labor (IDOL) is tasked with enforcement, and companies that are found to violate the law could be subject to the following:

• Civil penalties that range from $500 to $10,000, depending on the size of the business and the severity of the violation.

 

• Repeat violations may lead to more severe penalties, including increased fines and potential audits by the IDOL.

 

• Public notice of violations, which could harm your agency’s reputation, leading to decreased trust from both clients and job seekers.

 

Steps Staffing Agencies Should Take

To avoid penalties and ensure compliance with the new pay transparency requirements, staffing agency owners should consider the following steps:

1. Work Closely with Clients: Make sure your clients understand the importance of providing salary information. It may help to create a template or checklist to collect this data efficiently.
2. Review Job Listings: Audit current job postings to ensure they include accurate salary ranges. Moving forward, make this a standard practice for all new job orders.
3. Educate Your Team: Ensure your recruiters and account managers are aware of the new law and know how to communicate these requirements to clients.
4. Monitor for Updates: Stay informed on any changes or clarifications to the law. Illinois may adjust or further refine the requirements, and staying ahead of these developments will be crucial.

 

How StaffBoss Can Help

For staffing agencies using StaffBoss, staying compliant with Illinois’ new pay transparency requirements is easier. The software allows agencies to quickly update job postings with salary ranges, ensuring every listing meets the legal standards. The integrated ATS/CRM also simplifies record-keeping by tracking pay data for each job order, making it easier to provide documentation if needed. This automated system ensures you stay organized and compliant, while reducing the administrative burden on your team.

 

Sources: Lexology Article, ISSA Communications

 

 

“Please note that while we strive to provide helpful information, it is important for you to stay up to date with the latest developments in Massachusetts pay transparency law. We may not communicate every update or change regarding the law, and recommend consulting with legal counsel or official state resources to ensure full compliance with current regulations.”