Employers in Illinois just received some good news. 

On Aug. 29, Illinois Governor Bruce Rauner vetoed House Bill (HB) 2462, which amended the state’s Equal Pay Act of 2003. It would have prevented employers from asking job applicants about their salary history and lowered the burden on employees claiming equal pay violations.

If the Governor had signed the bill into law, it would have placed several restrictions on employers during the hiring process. Employers would have been prohibited from:

  • Requiring employees to sign a contract or waiver that would prevent them from disclosing or discussing their wages.
  • Screening applicants based on their wage or salary history. Employers would need to ban all policies requiring that a job candidate’s prior wages satisfy minimum or maximum criteria.
  • Contacting an applicant’s current or former employer about their prior wages. However, the amendment noted two exceptions: if the individual is a current employee who’s applying for a new job at the same company or if the candidate’s wages are a matter of public record.

Currently, the Illinois Equal Pay Act requires plaintiffs to “show that they were being paid less than an employee of the opposite sex ‘for the same or substantially similar work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions,’ subject to certain exceptions,” states the article.

These amendments would have further tied employer hands. If passed into law, employees would have been required to show only that the performance of the jobs in question required substantially similar skill, effort, and responsibility.

Likewise, employers involved in equal pay claims could no longer defend themselves on the grounds that payment was “made under a differential based on any factor other than sex or a factor that would constitute unlawful discrimination under the Illinois Human Rights Act,” according to the bill.

The article’s author states that employers would have “borne the additional burden of showing that the other factor was not related to a pay differential based on sex or another protected characteristic, was job-related and consistent with business necessity, and accounted for the entire differential in question.”

These types of amendments are among the latest employment trends. An increasing number of states and cities are trying to close pay gaps through similar legislation that restricts employers from obtaining salary history information or using it to determine salary. Consider that seven states or local jurisdictions – Delaware, Massachusetts, New York City, Oregon, Philadelphia, Puerto Rico and San Francisco – have passed similar laws while California, North California and Pennsylvania have proposed similar bills, according to The National Law Review (NLR).

As these types of bills gain steam, the NLR suggests that employers review their employment applications, hiring and pay practices and any confidentiality agreements to ensure that employees aren’t prohibited from discussing their wages. It would also be smart to educate recruiters and hiring managers on how to comply with pay history prohibitions.

Although such bills may not be passed in every part of the country, employers – especially those in multiple states – still need to be competitive. They must have the ability to recruit job candidates who were or still are employed at companies in states that have passed such legislation.

One last consideration: Think about the potential for company fines imposed by such bills. Take compensatory damages or punitive damages, for example. That’s just the beginning. Add those costs to injunctive relief, attorney fees and expenses and a five-year statute of limitations.

Observing a business as usual approach is no longer valid. Be prepared for change since that’s the only thing you can count on in today’s employment market.