On March 23, 2021, Governor Pritzker signed the Employee Background Fairness Act (the “Act”), imposing several new obligations and restrictions on Illinois employers. The new law amends the Illinois Human Rights Act to significantly limit employers’ ability to disqualify a job applicant or current employee based on the individual’s criminal record. The Act also amends the Illinois Business Corporation Act and the Illinois Equal Pay Act of 2003 to obligate larger Illinois employers to file detailed statistical information regarding their workforce’s racial, ethnic, and gender composition and related wage data with the state.

Expanded “Ban the Box” Protections and Restrictions on Use of Criminal Background Checks

Effective on March 23, 2021, the Act expanded the protected categories under the Illinois Human Rights Act to include a record of conviction. The enhanced “ban the box” protections also prohibit employers from refusing to hire or making other adverse employment decisions based on an individual’s conviction record with two exceptions: there is “a substantial relationship” between the criminal offense and the employment sought/held, or granting/continuation of employment “would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.”

In determining whether a “substantial relationship” exists, the Act requires employers to consider six mitigating factors:

1. the length of time since the conviction;
2. the number of convictions that appear on the conviction record; 3. the nature and severity of the conviction and its relationship to the safety and security of others;
3. the facts or circumstances surrounding the conviction;
4. the age of the employee at the time of the conviction; and
5. evidence of rehabilitation efforts.

Notably, the Act’s restrictions align with existing Equal Employment Opportunity Commission (“EEOC”) federal guidance on the use of criminal background checks when making employment decisions.

EEO Workforce Composition and Equal Pay Data Reporting

This Act also requires larger Illinois employers who must file an annual Employer Information Report EEO-1 (“EEO-1 report”) with the EEOC to submit “substantially similar” information to the Illinois Secretary of State. Similar to the employment data in Section D of the federal EEO-1 report form, Illinois employers with 100 or more employees must file an annual corporate report documenting employees’ gender, race, and ethnicities. However, in a significant departure from the federal reporting requirement, Illinois will make this data public: the Secretary of State will publish on its website each company’s data on gender, race, and ethnicity for public viewing. This EEO reporting obligation begins on January 1, 2023.

Additionally, the law also requires Illinois employers with 100 or more employees to obtain an “equal pay registration certificate.” To do so, covered employers must submit to the Illinois Department of Labor their federal EEO-1 report, a list of employees separated by gender, race, and ethnicity with wage data, a statement of equal pay compliance, and a $150 application fee. Failure to obtain a certificate, or suspension or revocation of a certificate after an investigation, is subject to a mandatory civil penalty equal to 1% of the business’s “gross profits.” Equal pay data reporting begins on January 1, 2023. Employers must obtain an equal pay registration certificate by March 24, 2024 and recertify every 2 years.

Next Steps

All Illinois employers who use criminal conviction information for hire and other employment decisions should review their current policies or practices to ensure compliance with the new law. In anticipation of the Act’s EEO and wage-reporting requirements, larger employers who currently must file a federal EEO-1 report are encouraged to consider conducting a diversity and compensation audit to address any concerns before the Act’s reporting requirements take effect.

If you have any questions about the Employee Background Fairness Act, or are interested in conducting a privileged EEO audit of your employment practices to ensure compliance with the new law, Golan Christie Taglia’s Employment Law team is available to assist. Please contact Ashley Orler for more information.