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January 2023

Illinois Employment Law Developments – 2023 Legal Updates

As employers prepare for the new year, the following is a high-level overview of Illinois employment law developments. The developments include a new constitutional right for workers to organize and collectively bargain; changes to leave, rest, and anti-discrimination laws; upcoming equal pay certification requirements; minimum wage increases; continued expansion of the secure choice retirement savings program; and annual sexual harassment prevention training requirement under both Illinois and Chicago laws.

Illinois Approves Landmark Workers' Rights Amendment, Litigation Anticipated

In the November 2022 election, Illinois voters approved the Workers' Rights Amendment ("WRA") to the Illinois Constitution. The WRA guarantees workers a right to organize and collectively bargain over wages, hours, and other terms and conditions of employment. The WRA also permits mandatory union membership as a condition precedent to employment, prohibiting right-to-work laws.

The WRA provides in pertinent part: "No law shall be passed that interferes with, negates, or diminishes the right of employees to organize and bargain collectively over their wages, hours, and other terms and conditions of employment and workplace safety, including any law or ordinance that prohibits the execution or application of agreements between employers and labor organizations that represent employees requiring membership in an organization as a condition of employment."

Litigation challenging the WRA is anticipated. Opponents' primary legal argument is that the WRA is preempted by the National Labor Relations Act, which currently regulates collective bargaining in private-sector employment.

Even with many open questions raised by the WRA, Illinois employers should be aware of the potential for significantly expanded union rights. In addition, future litigation should clarify the extent of the WRA's impact.

New Requirements Under Illinois Leave, Rest, and Anti-Discrimination Laws

Effective January 1, 2023, the Family Bereavement Leave Act ("FBLA"), formerly the Child Bereavement Leave Act, requires employers with 50 or more employees within 75 miles of an employee's worksite to provide employees up to two weeks (10 work days) of unpaid bereavement leave under an expanded list of circumstances and covered family members. The circumstances include the death of a family member, losses related to an employee's miscarriage, unsuccessful fertility treatment, diagnosis with a negative impact on pregnancy or fertility, or failed or non-finalized adoption or surrogacy agreement. Eligibility for this unpaid leave is the same as under the Family and Medical Leave Act ("FMLA"): an employee must have at least one year of employment with a covered employer, with at least 1,250 hours of service in the preceding 12 months. Although employers may request both advance notice and reasonable documentation supporting a FBLA leave request, employees are not required to identify the specific reason for their leave if it is related to pregnancy, adoption, surrogacy, or fertility treatment. The Illinois Department of Labor published this form that employers may require employees to complete.

Illinois employers must also comply with new requirements for employee meal and rest periods under the One Day Rest in Seven Act ("ODRISA"). ODRISA has long required employers to provide at least 24 consecutive hours of rest each week. However, effective January 1, 2023, the rest day requirement must be calculated based on each consecutive seven-day period rather than the pre-amendment use of "calendar week." Additionally, ODRISA has long required employers to provide employees with an initial 20-minute meal break scheduled no later than five hours after the employee begins work for shifts of 7.5 continuous hours or longer. Also effective January 1, 2023, ODRISA requires employers to provide an additional 20-minute meal period for every 4.5 continuous hours worked. Employee meal periods exclude reasonable time to use the restroom. The amendments also require employers to notify employees about ODRISA provisions via posters and email. Lastly, the amendments provide for more severe ODRISA violations, which now carry a series of increasing fines payable to the Illinois Department of Labor and as damages to employees.

Also, effective January 1, 2023, Illinois joins at least 17 other states in enacting the CROWN Act, which expands the Illinois Human Rights Act's definition of "race" to include "traits associated with race, including, but not limited to, hair texture and protective hairstyles such as braids, locks, and twists." Although employers are permitted to have dress codes and grooming policies, they should review such policies and practices to ensure compliance with the CROWN Act.

Equal Pay Certification Requirements

In March 2021, Illinois amended the Illinois Equal Pay Act imposing new equal pay compliance requirements on any private employer with 100 or more employees. More information about these initial amendments can be found here and here.

In short, employers with 100 or more employees in Illinois must obtain an "equal pay registration certificate" from the Illinois Department of Labor ("IDOL"). Employers must apply between March 24, 2022, and March 24, 2024. The specific deadline for each employer will fall within this window and be assigned by the IDOL.

The IDOL began distributing the notices via email to covered employers' representatives in January 2022, and it plans to continue doing so through the initial compliance period in March 2024. Employers may register their designated representative here.

To obtain this certificate, employers must apply with the following: (1) a $150 filing fee; (2) a copy of the employer's most recently filed EEO-1 report; (3) a list of total wages paid to each employee during the previous calendar year, broken down by gender, race, and ethnicity; (4) details about each employee's start date and county of work; and (5) any other information the IDOL deems necessary to determine if pay equity exists. The IDOL has posted templates and other guidance here.

Within 45 days of receipt of this information, the IDOL will issue an equal pay registration certificate or a statement explaining why the application was denied. If denied, employers will have 30 days to cure deficiencies and resubmit their application before penalties.

Given the scope of information requested and the upcoming deadline, organizations should begin to take steps to ensure compliance with these equal pay certification requirements in the near term, including conducting thorough pay audits.

Minimum Wage Increases

Effective January 1, the minimum wage in Illinois will increase to $13 per hour, and the minimum wage for qualified tipped employees will increase to $7.80 per hour. Some counties and cities have higher minimum wages. For example, the minimum wage in Chicago is $15.40 per hour for employers with more than 20 employees and $14.50 per hour for employers with 4 to 20 employees. The minimum wage in suburban Cook County is $13.35 per hour.

Illinois Continues Expansion of Mandatory Secure Choice Retirement Savings Program

The Illinois Secure Choice Retirement Savings Program ("SCRSP") is a Roth individual retirement account for private sector employees without access to employer-sponsored retirement plans. Initially, the SCRSP applied only to employers with 25 or more employees that had been operating for at least two years and did not offer a qualified plan. Recent legislation expanded SCRSP to cover employers with five or more employees. Employees continue to have the right to opt-out, and employers are not required to make contributions.

Under the SCRSP, covered employers must distribute certain information regarding the program, facilitate employee enrollment, and implement and remit employee payroll deduction contributions to the program. Penalties for failure to register include fines of $250 to $500 per employee.

Covered employers will receive notifications of their obligations and applicable deadlines. The enrollment deadline for employers with 16-24 employees was November 1, 2022. The enrollment deadline for employers with 5-15 employees to register is November 1, 2023.

Reminder: Annual Sexual Harassment Prevention Training for Illinois Employers

Illinois employers are required to provide annual sexual harassment prevention training to all employees meeting the requirements proscribed by the Illinois Department of Human Rights. More information can be found here.

New Additional Sexual Harassment Prevention Requirements for Employers with Chicago Employees

On July 1, 2022, amendments to the Chicago Human Rights Ordinance were enacted, imposing new sexual harassment prevention requirements on employers with Chicago employees. These requirements are in addition to those under the Illinois Human Rights Act mentioned above.

Chicago employers must complete the first round of annual sexual harassment prevention training, which includes a minimum of two hours of training for non-supervisory employees and three hours for supervisors and managers by June 30, 2023. Training materials may be found here. The ordinance also requires that employers have a written policy with specific provisions and post a notice. A model policy and notice may be found here.

We recommend that Illinois employers revisit and update their policies and practices to ensure legal compliance with these recent and upcoming changes. Gordon & Rees attorneys are available to assist with these and other workplace issues.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between Gordon Rees Scully Mansukhani and any recipient. Accordingly, recipients should consult with counsel before taking action based on the information contained in this material.

Employment Law

Patrick F. Moran
Brian Roth

Employment Law