Several new laws have been passed in the Illinois General Assembly recently that will impact both employers and employees across Illinois. The last step before enactment is for Governor Pritzker to sign off on these bills.
The new laws bring several changes to the table, including:
- Creating limitations on contract terms and employee handbooks
- Amending three acts: the Illinois Human Rights Act, the Illinois Equal Pay Act, and the Victims’ Economic Security and Safety Act
- Requiring more anti-harassment trainings for employers
- Legalizing recreational cannabis use
These changes will impact employer policies. For example, employers will need to update discrimination policies and procedures, or if recreational cannabis is legalized, this could create concerns if an employer still prohibits drug use.
The Workplace Transparency Act (Effective January 1, 2020)
The Workplace Transparency Act (IWTA) aims to prevent workplace harassment and discrimination by improving the security of employees’ rights. Within employer contracts and policies, the IWTA prohibits specific aspects of confidentiality, non-disparagement, and arbitration clauses, unless other statutory requirements are first met.
The IWTA requires Illinois employers to both review and update their contracts, particularly their noncompete, non-solicitation, and confidentiality terms, in addition to separation or severance and arbitration agreements and employee handbooks and policies.
It’s important to note, however, that these new terms don’t apply to collective bargaining agreements, which applies to both private and public employers that have unionized workforces.
All contracts and policies:
The IWTA requires that, without exception, no contracts or agreements can contain language that prohibits employees from reporting “unlawful conduct” to officials, whether local, state, or federal, for investigation. This law is relevant to prospective, current, or former employees, and applies to all types of policy document or employment agreement (formal employment agreements; executive compensation agreements; noncompete, non-solicitation, or confidentiality agreements; or separation agreements).
“Unlawful conduct” can include criminal conduct or unlawful employment practices—for example, behavior that would violate the anti-harassment and discrimination laws outlined by the Illinois Department for Human Rights (IDHR) and the Equal Employment Opportunity Commission (EEOC).
The IWTA also prohibits, without exception, any provisions that would prevent an employee to testify in the event of a subpoena, court order, or other written request regarding criminal conduct, discrimination, harassment, or other unlawful employment practice.
Unilateral employment contracts and policies:
Employment contracts and policies—specifically those that are non-negotiated or that must be signed as a condition of employment—are not allowed to prohibit any employee, whether prospective, current, or former, from making disclosures or truthful statements regarding alleged discrimination and harassment or unlawful employment practices.
An example of what this means is that if any provision or clause could be read to indicate that it prevents an employee from truthfully stating or disclosing discrimination or harassment, regardless of how a contract provision was enforced, the clause would then be unenforceable.
If employers wish to keep this kind of provision, they could be required to negotiate agreements that contain confidentiality clauses with employees and include bargained-for consideration and a clear acknowledgment of employees’ right to do the following:
- Inform a local, state, or federal agency that enforces discrimination laws of good-faith allegations of unlawful practices
- Inform local, state, or federal officials of good-faith allegations of criminal conduct
- Contribute to proceedings with any local, state, or federal government agency that enforces discrimination laws
- State or disclose any truthful information that is required by law, regulation, or legal process
- Seek out or receive legal advice that is confidential
Unilateral arbitration agreements:
Certain agreements may not be enforceable that meet the following criteria: agreements that are non-negotiated and require arbitration of discrimination and harassment claims (as opposed to wage and hour claims) as a condition of employment. Similar to confidentiality agreements, however, arbitration agreements could still be enforceable under the new law if they are negotiated with the employee and include bargained-for consideration and acknowledge the five employee rights listed above.
Under the potentially amended Illinois Uniform Arbitration Act, arbitration agreements may be non-compliant with the IWTA and thus they may be void. It is still unclear whether Illinois arbitration agreement law will be preempted by federal law in some cases. Thus, these agreements must be drafted carefully to ensure that they are enforceable.
Settlement and termination agreements:
Termination agreements (also known as separation or severance agreements) and settlement agreements could include confidentiality promises that relate to discrimination and harassment if these statutory requirements are met:
- The employee has documented confidentiality as a preference, and the obligation is mutual under the contract.
- It is told to the employee in writing that he or she has a right to an attorney or representative (of his or her choosing) to review the contract before it is signed.
- In exchange for the confidentiality, there is a bargained-for consideration that is valid (for example, a severance payment instead of just the payout of final earned compensation).
- No claims of discrimination or harassment are waived in the agreement that ensue after the agreement execution date.
- The employee has 21 days to consider the agreement before signing it, in addition to 7 days to withdraw acceptance of the agreement. (This is similar to the drafting of waivers of age-related claims at the federal level, with people who are over 40.)
The employee would in no way be precluded from releasing discrimination and harassment claims by the IWTA, except prospective claims.
If employees are successful when they challenge a violating contract’s enforceability under the IWTA (but not an employment policy), they will have the right to recover attorney fees and costs.
However, employers could require the following individuals to maintain confidentiality of discrimination and harassment allegations:
- Employees who, as part of their job duties (e.g., human resources professionals) receive complaints, investigate allegations, or have access to confidential information regarding personnel
- A third party or employee who is asked to participate in an open and ongoing investigation (e.g., a witness)
- A third party or employee who gets attorney work product or communications that are attorney-client privileged, or who is subject to a recognized privilege
- Any third party that investigates complaints, hired by the employer
Illinois Equal Pay Act Amendments (Effective 60 Days After Signed)
The following amendments would apply to the Illinois Equal Pay Act.
Wage and salary history of job applicants:
The amendments would prohibit employment agencies and employers from requesting the following information or requiring job applicants to disclose it: prior wage, salary, benefit, or other compensation history information as a condition of the application process or of employment. They are also prohibited from otherwise screening job applicants by requiring they meet minimum or maximum compensation criteria.
Both employers and employment agencies will be prohibited from seeking the above information about job applicants from current or prior employers. However, they are not prohibited from talking with applicants about wage, salary, benefits, or other compensation expectations.
If prior compensation history is disclosed voluntarily by the applicant, the information cannot be considered when the employer is deciding whether or not to make a job offer, nor in determining the terms of the job offer. To comply with these amendments, employers will likely need to update their job boards, interviewing processes, recruitment practices, and job applications.
Employers could also be subject to increased burdens in order to justify imbalances in pay among their employees. This especially applies to employees who have similar jobs but receive different pay rates, and employers could be required to show that the difference in pay is because of job-related reasons that are: 1) consistent with the needs of the business and 2) accounts for the difference in compensation, if there have been allegations against the employer that they underpay certain employees based on their sex or for being African American.
Wage and salary information of employees:
The amendments state that employees cannot be prohibited from being able to disclose or discuss compensation information, including that regarding wage, salary, or benefits. But, if certain positions require access to this information, such as human resources employees, they can be told to keep this information confidential. To be in accordance with these changes, handbooks, policies, and confidentiality agreements may need to be updated.
To enforce these amendments, State court lawsuits may be filed by employees who are seeking “special damages” of a maximum of $10,000, or actual damages more than $10,000, injunctive relief, and costs and reasonable attorney’s fees. If an employee can prove that he or she was underpaid based on their sex could receive the underpayment amount, punitive damages, and injunctive relief, in addition to uncapped compensatory damages if it is also proven that the employer behaved with malice or reckless indifference. Penalties up to $5,000 could also be sought by enforcement actions from the Illinois Department of Labor for each employee that was impacted and for each violation.
Illinois Human Rights Act Amendments (Effective January 1, 2020)
To address the security of employees’ rights to protection from harassment and discrimination, the Illinois Human Rights Act (IHRA) would be amended in the following ways.
The IHRA would be applicable to Illinois employers with one or more employees during 20 or more calendar weeks during the current year or within the year before the alleged violation took place. This amendment is significant because as the IHRA stands now, this applies only to employers with 15 or more employees. The expanded coverage would go into effect on July 1, 2020.
Expanded protected classes:
Discrimination and harassment prohibitions would be expanded so that all actual and perceived protected classes, which include race, sex, age, religion, or sexual orientation, among others, would be covered. Additionally, the amendment further defines harassment as any “unwelcome conduct” with “the purpose or effect of substantially interfering with the individual’s work performance or creating an intimidating, hostile, or offensive working environment.” This definition is more broad than federal law.
Clarified work environment:
Regarding the prohibition of discrimination and harassment, the work environment will no longer be limited to an employee’s assigned physical location.
The IHRA amendment would also update harassment responsibility for the employer. They may be responsible for harassment by employees who are non-managerial and non-supervisory if the employer is made aware of the behavior and does not take appropriate action. In addition, employers would be responsible for harassment of non-employees who are in the workplace to provide services for the employer. This could apply to consultants or contractors, for instance.
Sexual harassment training for all employees would be required from employers, at least once a year. The training materials used will be developed by the IDHR or an equivalent body.
Restaurants, bars, and coffee shops:
A written sexual harassment policy must be made and given to all employees within their first week of employment. This policy has to meet certain statutory requirements, including that the employee must be given notice about the procedures to file a charge with the IDHR and EEOC. Mandatory training programs specific to the bar and restaurant industry will be designed by the IDHR, and this will be in addition to the training program for all employers. These policies and trainings are required to be available in both English and Spanish.
Every employer that had an adverse judgment or ruling against it that is related to discrimination or harassment must report information about the judgments or rulings to the IDHR, starting July 1, 2020, and recurring by each July 1 thereafter. When charges of discrimination are investigated, the IDHR could request that employers disclose information about settlements that involve discrimination and harassment allegations, though this excludes the names of the alleged victims.
Penalties will apply to employers that do not meet these training and disclosure requirements. The penalties are not to exceed:
- $500 for the first offense
- $1,000 for the second offense
- $3,000 for the third and any following offenses
If the same union represents the victim and the perpetrator of alleged sexual harassment, different representatives from the union must be delegated to represent them in proceedings.
Procedures for filing charges and investigation would be included in the amendments. The changes include that either party would now be allowed to ask the IDHR for a pending charge dismissal if a lawsuit at the state or federal level is filed because of the same issues that were raised in the charge. Another update is greater clarity regarding prior amendments in 2018, which allowed the charging party to bypass investigation procedures and go directly to the state court.
The Victims’ Economic Security and Safety Act (Effective January 1, 2020)
Another amendment applies to the Victims’ Economic Security and Safety Act (VESSA), which would expand protections for victims of domestic and sexual violence, sexual assault, and stalking to those victims of gender violence.
Gender violence is an act or acts of violence or aggression that would be considered a crime under state law and is committed (at least partially) based on someone’s actual or perceived sex or gender, or based on physical instruction or invasion that is a crime, whether or not criminal charges are brought. The threat of any of these actions would also be included.
If an employee is a victim of domestic, sexual, or gender violence, or has family members who are victims, employers are now required to give them up to 12 weeks of leave within a year, with job protection, or a similar accommodation that could be determined by how large the employer is. The employee victim can take this leave for counseling, legal help, medical services, safety planning, and the like.
Hotel and Casino Employee Safety Act (Effective July 1, 2020)
Hotel and casino workers in Illinois will be protected from sexual assault and harassment under the Hotel and Casino Employee Safety Act, which requires employers within these industries to give employees assistance in the event of an ongoing crime, sexual harassment or assault, or other emergency. Employers would be required to give them safety devices or other notification tools.
This act also requires relevant employers to incorporate anti-harassment policies that meet statutory requirements. These requirements include things like temporary work assignments, reporting procedures for complaints, or paid leave to testify or file a police report. The act states that lawsuits can be filed by employees in state court and they could recover attorneys’ fees and economic damages of $350 per day and per violation.
Cannabis Regulation and Tax Act (Effective January 1, 2020)
Cannabis Act employer obligations:
Recreational cannabis is on the horizon for Illinois if the bill is signed, which would make it the eleventh state to legalize recreational cannabis. The Cannabis Regulation and Tax Act (also known as the Cannabis Act) will begin on January 1, 2020. This act will allow Illinois adults to both possess and consume cannabis, but it may create issues for Illinois employers. The Cannabis Act does allow employers to implement reasonable and nondiscriminatory policies that support zero-tolerance, drug-free workplaces, which could include drug testing and workplace-use prohibition policies.
The Cannabis Act permits employers to ban cannabis use to meet contract obligations or to comply with state or federal funding or legal requirements. However, employers generally cannot take an adverse action against an employee or an applicant because of their marijuana use outside of the workplace. The Illinois Right to Privacy in the Workplace Act is also amended so that marijuana products are legal and must be treated similarly to tobacco and alcohol. Employment decisions cannot be made based on whether an applicant or employee uses cannabis off-site, during nonworking hours (or non-call hours), whether medically or recreationally, as long as the use is lawful.
Employers should then assess whether or not an employee is actually impaired or under the influence of cannabis during working hours if they are considering disciplinary action against an employee, since they are not allowed to consider the lawful use of cannabis outside of work. Disciplinary action would be allowed if an employer has a “good faith belief” that their employee is under the influence in a situation that is similar to “reasonable suspicion” standards.
If an employer decides to act on this disciplining, they are required to give the employee an opportunity to contest the decision, and drug testing could be used in this case. However, legal challenges could arise because cannabis-related impairment is more difficult to discern when compared to alcohol impairment testing, for example. In addition, employee victims could recover actual damages, costs, attorneys’ fees, and fines, so employers need to make sure that they are taking these new laws into consideration before acting. Practices and procedures should be updated accordingly.
Labor peace agreements:
Labor peace agreements aim to give labor organizations the ability to access and organize the workforce of a business that is licensed to dispense cannabis. Organizations that are applying for a cannabis-dispensing license should thus note that the state government will consider whether they have entered into a labor peace agreement with a labor organization. Because these agreements can be complicated, it’s important to work with an attorney experienced in labor law.
Illinois’ pending legislation means that employers need to update their documents and policies accordingly. This includes reviewing and revising employment agreements, employee handbooks, and non-disclosure and separation agreements. Any other policies or agreements related to employment will also need to be revised accordingly so that employers are in compliance with these amendments.
In many cases, employers struggle to keep up with constantly-changing state legislation. Even one compliance infraction could cost your business hundreds of thousands of dollars in fines. Consider working with a compliance partner like Launchways to ensure all your compliance concerns are taken care of proactively.