The Illinois General Assembly recently passed a number of bills that, if signed by Governor Pritzker, would impose significant new duties upon Illinois employers. Employers should review these new changes to the law and be prepared to revise internal policies, documents, training practices, and employer-employee contractual agreements as necessary.
The Illinois Workplace Transparency Act (IWTA) (effective January 1, 2020) is a wide-ranging Bill that would promote the state’s interest in securing individual’s freedom from unlawful discrimination and harassment in the workplace. In doing so, the Bill would also significantly affect Illinois employers.
Under the IWTA, no agreement may prohibit or restrict an employee, prospective employee, or former employee from reporting allegations of “unlawful employment conduct” to federal, state, or local officials for investigation. Such conduct is defined to include any form of unlawful employment discrimination, harassment, or retaliation under the Illinois Human Rights Bill or “any related state or federal rule or law” enforced by the Illinois Department of Human Rights or the U.S. Equal Employment Opportunity Commission. This rule will apply to all forms of employment contracts and documents, meaning that employers will likely need to review and revise existing employee handbooks and workplace policies.
Further, the IWTA would prohibit certain unilateral agreements that aim to limit the employee or prospective employee’s ability to challenge unlawful employer practices. Under the Bill, any clause or provision in a unilateral agreement, such as a form confidentiality agreement that an employer presents to employees and requires them to sign before beginning employment, will be considered void under certain conditions. That is, it will be considered void if it has “the purpose or effect of preventing an employee or prospective employee from making truthful statements or disclosures about alleged unlawful employment practices” or “requires the employee or prospective employee to waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit related to an unlawful employer practice to which the employee would otherwise be entitled.”
Mutual agreements, however, may be permissible under certain circumstances. A mutual agreement may include provisions that would otherwise be against public policy under the Bill only if 1) the agreement is in writing, 2) demonstrates actual knowing and bargained for consideration from both parties, and 3) acknowledges the right of the employee or prospective employee to report good faith allegations of unlawful employment practices, participate in any proceeding with a federal, state, or local government agency enforcing discrimination laws, or make any truthful statements or disclosures required by law, regulation, or legal process.
Likewise, employers will be limited in their ability to require confidentiality in settlement or termination agreements. In fact, within the scope of these types of agreements, confidentiality requirements will only be permissible where 1) confidentiality is mutually beneficial to both parties (what that means is unclear), 2) the employer notifies the employee, prospective employee, or former employee in writing of the right to have an attorney or representative review the settlement or termination agreement before it is executed –there is consideration in exchange for confidentiality and 3) the settlement or termination agreement does not waive any claims that accrued after the date of execution of the agreement. The settlement or termination agreement must be provided to the employee in writing and the employee must be given a period of 21 calendar days to consider the agreement before execution as well as seven (7) calendar days following execution to revoke the agreement.
Importantly, the IWTA would allow employees to recover reasonable attorneys’ fees and costs incurred in challenging a contract in violation of the Bill.
The Illinois Human Rights Act (IHRA) (effective January 1, 2020) would also be expanded in numerous respects. For instance, the prohibition against discrimination and harassment would be broadened to cover “actual” and “perceived” protected classes (e.g., sexual orientation, marital status, pregnant women, etc.). Notably, the bill would also draw out the definitions of both “working environment” and “employee.” “Working environment” would no longer be limited to a physical location where an employee is assigned to perform his or her duties. Furthermore, employers would also be liable for harassment of non-employees, including contractors, consultants, and individuals performing contracted services in the workplace.
While expanding harassment protections, the amendments would simultaneously impose requirements for sexual harassment training. On this note, the Bill directs the Department of Human Rights to produce a model sexual harassment training program and Illinois employers must use this program or their own sexual harassment prevention training programs that equal or exceed the minimum standards required by law. The training must be required at least once a year to all employees. Restaurants, bars, and hotels will face additional requirements; they will be required to engage in additional sexual harassment prevention activities and be required to have a written sexual harassment policy given to all employees within the first week of employment.
Finally, the new IHRA amendments would impose requirements of disclosure on employers for publication in an annual report. Beginning July 1, 2020, employers of one or more employees in the state of Illinois must make disclosures of all adverse judgments or administrative rulings during the preceding year. Where the Department of Human Rights is investigating a charge, the Department may request the employer to submit the total number of settlements entered into during the preceding five (5) years that relate to certain bills or alleged bills of sexual harassment or unlawful discrimination, as well as the total number of settlements. In making these disclosures, the employer may not disclose the name of the victim of an act of alleged sexual harassment or unlawful discrimination. The Department of Human Rights will then publish an annual report aggregating the information reported by employers. An employer’s failure to make the required disclosures may result in the Department of Human Rights seeking an entry of an order imposing a civil penalty against the employer. Employers who do not meet these training and disclosure requirements will face penalties not to exceed $500 for the first offense, $1,000 for the second offense, and $3,000 for the third and subsequent offenses.
Amendments to the Illinois Equal Pay Act (effective 60 days after signed) will impose important limitations on the types of inquiries that employers are able to make of their employees. If signed into law, employers will be prohibited from requiring job applicants to disclose prior wage, salary, benefit, or other compensation history as a condition for employment. Employers will also no longer be able to seek this information from any current or prior employers of job applicants.
Further, employers will face increased burdens regarding pay justification. For example, if employers pay two employees performing “substantially similar” jobs at different rates, they may be required to demonstrate the reason for this difference. Employees may file suit in state court to enforce these requirements and any employees who can prove that they were underpaid because of their sex could receive both the amount of the underpayment along with punitive damages, injunctive relief, and uncapped compensatory damages if the employer acted with malice or reckless indifference.
Finally, if signed, the Cannabis Regulation and Tax Act (effective January 1, 2020) will impose additional burdens and requirements upon employers. With Illinois poised to become the eleventh state to permit recreational cannabis, the Cannabis Act will allow adults in Illinois to possess and consume cannabis. While the Act permits employers to enforce nondiscriminatory zero tolerance and drug-free workplace policies, it will also prohibit employers from taking any adverse action against an applicant or employee for marijuana use outside of the workplace.
In light of these potentially expansive changes to Illinois employment law, Illinois employers will need to review and revise as necessary all internal documents, handbooks, and policies for compliance.