New laws that have a significant impact on Illinois employers went into effect earlier this year.  As of January 1, 2015, Illinois has new restrictions on employer criminal background inquiries, expanded pregnancy accommodation protections, sexual harassment protections for unpaid interns, limitations on payroll card programs, required retirement savings accounts for some private employers, and changes to the investigation of equal pay violations.

New Restrictions on Criminal Background Inquiries

If your employment application asks about criminal convictions, you likely are in violation of a new Illinois law. Under the Job Opportunities for Qualified Applicants Act, commonly referred to as “Ban the Box,” Illinois employers with 15 or more employees are restricted from asking about, or using an applicant’s criminal record or criminal history in any manner, until the employer has determined the applicant is qualified for the position and notifies the applicant he or she has been selected for an interview. If the employer does not offer the applicant an interview, the employer may not ask about or use the applicant’s criminal record or history until after the employer makes an offer of employment contingent on a criminal background check.

As with every law, there are exceptions. Here, for example, employers subject to a federal or state law requiring the exclusion of applicants with certain criminal convictions may inquire about criminal convictions on an employment application.

Expanding the Scope of Pregnancy Accommodations

Illinois employers are now required to make accommodations for employees who are pregnant, recently experienced childbirth, or have medical or common conditions related to pregnancy or childbirth. Under the new amendments to the Illinois Human Rights Act, employers may not:

  • refuse to hire, or provide reasonable accommodations for, employees who are pregnant, recently experienced childbirth, or have related medical or common conditions, unless the employer can prove that providing the accommodation would present an undue hardship on the ordinary operation of business;
  • discriminate or retaliate against an employee for her pregnancy, childbirth or related medical or common conditions, or for requesting an accommodation for her pregnancy, childbirth or related medical or common condition;
  • require an employee to accept an accommodation that she did not request; and
  • require an employee to take a leave of absence if another reasonable accommodation can be provided that would allow the employee to continue working.

Some examples of reasonable accommodations include: more frequent or longer breaks to use the bathroom, to drink water, or to rest; temporary transfer to a less strenuous or hazardous position; part-time or modified work schedule; and reassignment to a vacant position. The new amendments also require employers to post a notice of the Act’s requirements in the workplace.

Sexual Harassment Protection for Unpaid Interns

Unpaid interns, who were not previously classified as employees under the law, are now “employees” for the purpose of protection from sexual harassment by the Illinois Human Rights Act and thus may file a lawsuit for sexual harassment.

An unpaid intern under the amended law is a person who performs work for an employer under the following conditions:

  1. the employer is not committed to hiring the intern at the end of the intern’s tenure;
  2. the employer and the intern have agreed that the intern is not entitled to wages; and
  3. the work performed:
    1. supplements training provided in an educational environment that may enhance the employability of the intern;
    2. provides experience for the benefit of the intern;
    3. does not displace regular employees;
    4. is performed under close staff supervision; and
    5. provides no immediate advantage to the employer.

Unpaid interns should now receive the same handbook provisions addressing sexual harassment and attend sexual harassment training.

New Requirements for Payroll Card Programs

This year, Illinois employers may pay their employees by means of payroll cards, provided they do not require employees to accept payroll cards as the only means of payment and they furnish alternative payment forms to employees who do not wish to use payroll cards. Additionally, employers must comply with the wishes of employees who opt out of a payroll card program within two pay periods of receiving notice.

Payroll card programs also must provide:

  • clear and conspicuous written disclosure explaining the terms and conditions of the program, including information on account and transaction fees;
  • a method, at a readily available location, for employees to withdraw their full net wages once per pay period at no cost;
  • a free and complete monthly transaction history upon employee request; and
  • at least one accessible system for employees to obtain their account balance.

The new law restricts fees for program participation, declined transactions, point of sale transactions, and employer wage loading. Moreover, payroll card programs are prohibited from being linked to any form of credit, and must include unauthorized user protections in accordance with state and federal law.

Private Employers Required to Provide Retirement Savings Plans

As of June 2015, certain private employers will be required to offer individual retirement savings accounts to employees under the Illinois Secure Choice Savings Program. The Program will be required for all private employers with 25 or more employees who have been in operation for two or more years and who have not previously offered a qualified retirement plan. The contributions will consist of automatic payroll deductions of three percent of the employee’s compensation, unless the employee chooses otherwise. Under this new law, employers will be required to:

  • follow the implementation procedures set by the Illinois Secure Choice Savings Board;
  • establish a payroll deposit retirement savings arrangement with its employees;
  • automatically enroll all employees who have not opted out of the Program;
  • pay the administrative cost(s) of providing payroll deductions; and
  • hold an open enrollment period for the Program once a year.

However, private employers may, at all times, set up their own employer-sponsored retirement plan instead of participating in the Program. Private employers have until June 1, 2017 to implement either the Program or their own plan.

The Illinois Department of Labor May Refer Equal Pay Violations to the Illinois Department of Human Rights

As of January 2015, any equal pay violations filed with the Illinois Department of Labor could be referred to the Illinois Department of Human Rights for investigation. The Equal Pay Act of 2003 was amended to allow this referral where an equal pay complaint also alleges a violation of the Illinois Human Rights Act. The Department of Labor will review the investigation and findings of the Illinois Department of Human Rights and may take charge of the ultimate enforcement of the Equal Pay Act.

How Should Employers Respond To These Legislative Developments?

Employers should ensure that their policies and practices comply with each of the State’s new and updated laws. As usual, proactive consultation with counsel will help to ensure that employers comply with the new laws and avoid potential exposure from non-compliance.