Illinois No Salary History Law: A Tool for Employers
A new Illinois law went into effect on September 29, 2019. The No Salary History law requires that employers eliminate questions about job candidates’ salary, wages, and benefits history from the hiring process. While this is a requirement, it is also an opportunity for employers to improve pay equity within their workplaces. For some employers, this is old news—they’ve been in the vanguard of the movement for pay equity and already eliminated the question from their hiring process and materials. For others, this will change how they do business—but also represents an important first step toward advancing pay equity in their workforce.
How The Law Helps Close the Gender Wage Gap
In Illinois, women make up almost half of the workforce, yet earn an average of 78 percent of what men earn. The discrepancy is even worse for black women, who earn 63 percent, and Latinas, who earn just 49 percent of what white men earn.
If a woman’s current or prior salary, wages, benefits, or other compensation is a major determinant for their next salary offer, the pay discrimination they may have faced in previous jobs will continue to follow them, no matter the intentions of their new employer. Basing salary offers on the demands of the job itself and the qualifications and experience of the applicant provides employers an opportunity to put an end to the discrimination a woman may have faced and begins to eliminate any gender-based disparities within their own workplaces. Employers can conduct research, utilizing the U.S. Bureau of Labor Statistics, purchasing salary data, or consulting websites like PayScale, Glassdoor, or Salary.com to help determine the market pay range for their open positions.
Basics of the New Law
By following the restrictions in the law, employers in Illinois get to play a role in eliminating pay disparities between men and women that can follow women from job to job when not addressed.
Restricted Activities
It is pretty simple to comply with this law: Make sure no materials used in the hiring process include questions about an applicant’s current or prior salary, wages, or benefits. That includes anything used for reference calls, as employers cannot seek out compensation data through any means—unless the data is publicly available or the applicant is seeking another position within the same company. It also means that anyone acting on behalf of an employer, like a headhunter or temp agency, must remove these questions as well.
Employers are also forbidden from requiring employees to sign away their rights to discuss their salary with colleagues.
If you are found to be in violation of this new law, you could be required to pay damages up to $10,000, as well as civil penalties up to $5,000.
Allowable Activities
Employers can still have robust discussions about salary, wages, and benefits with job candidates by sharing the pay range for a position and asking a candidate for their desired salary or wage. Using only salary data resources can help identify appropriate salary and wage ranges to use to begin a negotiation.
A potential employee can choose to reveal their current or previous salary as well, though employers must ensure it is not used to determine the compensation they offer.
You Can Do Even More to Close the Gender Wage Gap!
The Illinois No Salary History law helps to eliminate the gender wage gap—but it will not close it completely. Employers can take the opportunity offered by this new law to root out pay discrimination more deeply with and beyond new hires. In addition to helping recruit and retain a diverse workforce with different skills, experiences, and backgrounds, employers stand to attract better talent. Positive experiences in the workplace can lead to good word of mouth and favorable reviews, which will benefit your company in the long run! So how can your business do even more to promote gender equity? Here are a few ideas.
Employers can be open and transparent about a job’s salary or wage range or the benefits that come with the position. Knowing salary ranges gives candidates and employees information that helps them understand whether they are being paid fairly and whether the open position is a good fit for them.
Actions speak louder than words. It will be beneficial for employers to do more than just say that equal pay is a priority—the next step is for employers to determine if they are, in fact, paying everyone equitably. Conducting regular pay audits and advancement analyses will help uncover discrepancies, allowing employers to address any compensation differences that can impede efforts to foster diversity, equity, and inclusion.
Employers also should recognize that bias can slip into multiple areas of the hiring process, from application to interview, and into their internal advancement and promotion practices as well. Creating protocols—like blind resume reviews—and diversifying interview teams can limit bias. Analyzing compensation decisions before they are finalized can help mitigate instances of gender bias that might stem from conscious or unconscious attitudes about negotiation or motherhood, both of which, studies show, often lead to pay discrimination for women. It is vital to ensure that opportunities for advancement are equally distributed.
The No Salary History law is a new requirement for employers in Illinois. And it’s also an opportunity. We all want diverse and inclusive workplaces, and we won’t get there without fostering equity in our companies. By eliminating one source of pay discrimination, this new law helps ensure we are properly valuing and compensating people of all backgrounds and experiences. But this law alone won’t end pay gaps, and forward-thinking companies will choose to do more. It is up to each employer to continue the work themselves.
Want more ideas on how to advance gender equity in your workplace? Women Employed can help! Contact Sharmili Majmudar, EVP of Policy and Organizational Impact, at [email protected] or 312-782-3902 x243.