Illinois employers have a plethora of new laws to keep up with for 2022. From new Chicago and Cook County patron vaccination orders, to new laws limiting restrictive covenants, to pay data reporting (and more!), new Illinois laws are certain to make for a busy 2022 for Illinois employers. Here are 10 changes employers should know now as we get the ball rolling in 2022.
Chicago and Cook County Vaccination Orders Require Some Employers to Check Vaccination Status of Employees and Require Testing for Unvaccinated Employees
Employers at restaurants, bars, gyms, and other establishments in Chicago and Cook County have already started scrambling to implement patron vaccination requirements–and requirements that they obtain the vaccination status of their employees and require weekly testing for employees who aren’t fully vaccinated. As of January 3, 2022, Mayor Lightfoot’s Public Health Order 2021-2 and the Cook County Department of Public Health’s Public Health Order 2021-11 took effect. Under the Orders, covered businesses (including establishments where food and beverages are served, gyms and fitness venues, and entertainment and recreation venues in areas where food and beverages are served) must:
- Turn away patrons age 5 and over entering the indoor portion of an establishment unless they show a CDC COVID-19 Vaccination Record Card or an official immunization record (or a photo of the same) from the jurisdiction, state, or country where the vaccine was administered, reflecting the person’s name, vaccine brand, the date(s) administered and full vaccination status (two weeks after the second dose of the Pfizer or Moderna vaccine, or two weeks after a single dose of the Johnson & Johnson vaccine). There are certain narrow exceptions, such as allowing individuals inside for 10 minutes or less to carry out food or use the bathroom
- Post signage informing patrons of the vaccination requirement
- Develop and maintain a written record of the protocol for implementing and enforcing the Orders’ requirements
While covered businesses that are employers do not have to require employees to be vaccinated, they must:
- determine the vaccination status of each employee by requiring each vaccinated employee to provide acceptable proof of vaccination status (including whether the employee is fully or partially vaccinated), and maintain a record of each employee’s vaccination status; and
- require COVID-19 testing for employees who are not fully vaccinated. Employees who are not fully vaccinated and who report at least once every 7 days to a workplace where there are others present must be tested for COVID-19 at least once every 7 days and must provide documentation of the most recent COVID-19 test result to their employer no later than the 7thday following the date on which the employee last provided a test result.
Employers with 100 or more employees must also comply with the Occupational Safety and Health Administration Emergency Temporary Standard (OSHA ETS), at least for now. The US Supreme Court heard oral argument on whether to block the ETS at a special January 7 session, but until the Supreme Court issues its ruling, the ETS stands, requiring employers with at least 100 employees to implement and enforce a policy that mandates employees to be fully vaccinated or to submit to weekly COVID-19 testing and mask-wearing. For more on the Chicago and Cook County Orders and the OSHA ETS, see our blog here.
New Restrictions on Employee Restrictive Covenants Means Employers Must Reconsider Protective Measures
Effective January 1, 2022, the Illinois Freedom to Work Act (Public Act 102-0358) was amended to heavily restrict the use of restrictive covenants in Illinois for any contract entered into after January 1, 2022.
Under the amendment, covenants not to compete are banned for employees making $75,000 per year in earnings or less (with a salary threshold increase by $5,000 every five years until reaching $90,000 in 2037), and customer and coworker nonsolicitation agreements are banned for employees making $45,000 in earnings per year or less (with a salary threshold increase by $2,500 every five years until reaching $52,500 in 2037).
However, several types of agreements are excluded from the definition of “covenants not to compete” and can still be used by employers to curb unlawful competition and protect their confidential and trade secret data. Agreements excluded under the Act include confidentiality agreements, trade-secret and invention-assignment agreements, agreements entered into in connection with the acquisition or disposition of an ownership interest in a business, “garden-leave clauses” (i.e. agreements “requiring advance notice of termination of employment, during which notice period the employee remains employed by the employer and receives compensation”), “no-reapplication clauses” (i.e. agreements that “the employee agrees not to reapply for employment to the same employer after termination”), and even nonsolicitation agreements (for employees over the $45,000 a year threshold).
Other notable points:
- Employers must provide employees at least 14 calendar days to review restrictive covenants and advise the employee in writing to consult with an attorney before signing the agreement (but this notice and review period can be waived by the employee)
- Companies cannot enter into noncompetes and nonsolicits with employees who were terminated, furloughed or laid off as a result of either business decisions or government mandates arising out of the COVID-19 pandemic (and other similar types of pandemics or emergencies in the future) unless enforcement of the covenant not to compete includes compensation equivalent to the employee’s base salary at the time of termination for the period of enforcement, minus compensation earned by the former employee through subsequent employment during the enforcement period
- The law authorizes employees to recover attorneys’ fees and costs if the employee prevails in a lawsuit filed by the employer to enforce a noncompete or nonsolicitation agreement, and authorizes the Illinois Attorney General to initiate or intervene in litigation and initiate investigations of potential violations
- Courts can reform noncompete and nonsolicitation agreements under the law, rather than hold them unenforceable
In addition, the law also codifies existing case law in Illinois that requires noncompete and nonsolicitation agreements be supported by “adequate consideration” to be enforceable. Under the amended Act, “adequate consideration” is defined as either (1) 2 years of employment following the effective date of the agreement, or (2) some other consideration. The law provides that such “other consideration” can consist of “a period of employment plus additional professional or financial benefits or merely professional or financial benefits adequate by themselves.” Unfortunately, this definition does little to clarify what other forms of consideration will meet the adequate consideration requirement. Presumably, promotions and bonuses satisfy this standard, but employers will have to wait for case law or additional legislation to clear up the confusion.
Employers who haven’t already should review existing “form” employee agreements containing restrictive covenants to assess them for any necessary updates. Businesses should also train their HR departments and hiring managers to ensure compliance with the new law’s notice requirements. For a more complete discussion of Illinois’ new restriction on restrictive covenants, see our blog here.
Employers May Have to Report Equal Pay Data to the Illinois Department of Labor (IDOL) This Year–But Must Wait for a Personal Invitation
Under recent amendments to the Illinois Equal Pay Act (IEPA) (Public Act 101-0656 and Public Act 102-0036), private employers with more than 100 employees in Illinois who are required to file an annual EEO-1 with the Equal Employment Opportunity Commission (EEOC) will be required to regularly apply for an equal pay registration certificate with the Illinois Department of Labor (IDOL). Covered employers will have to provide demographic and wage data, a statement certifying the employer’s compliance with various equal pay and discrimination laws (among other things), submit their most recent EEO-1 report, and pay a $150 fee.
But employers won’t know when they’ll have to file until they hear from the IDOL. The IDOL will assign each employer a deadline for application between March 24, 2022 and March 23, 2024. Employers authorized to do business in Illinois as of March 23, 2021 must apply between March 24, 2022 and March 23, 2024, and employers authorized to do business in Illinois after March 23, 2021 must apply within three years of commencing business operations, but not before January 1, 2024—but everyone must wait for deadline assignments from the IDOL. There is no indication that filing before the IDOL assignment date is an option.
When applying or recertifying for an equal pay registration certificate, employers must compile a list of all employees during the past calendar year, and in the list:
- separate the employees by gender, race and ethnicity as reported in the company’s most recently filed EEO-1;
- include the county in which the employee works;
- include the date the employee started working for the business;
- include “any other information the IDOL deems necessary to determine if pay equity exists among employees” (this is likely to be an individualized request from the IDOL); and
- report the total wages paid to each employee over the course of the past calendar year, rounded to the nearest $100.
And in the certification statement, employers must attest:
- That the business complies with the IEPA and “other relevant laws”–including but not limited to Title VII, the federal Equal Pay Act of 1963, the Illinois Human Rights Act (IHRA) and the Illinois Equal Wage Act
- That the company’s average compensation for female and minority employees is not consistently below the average compensation (as determined by the US Department of Labor) for its male and nonminority employees within each of the major job categories in the EEO-1 for which an employee is expected to perform work. This takes into account factors such as length of service, requirements of specific jobs, experience, skill, effort, responsibility, working conditions, education or training, job location, use of a collective bargaining agreement or “other mitigating factors”
- That the business does not restrict employees of one sex to certain job classifications, and makes retention and promotion decisions without regard to sex
- That the company corrects wage and benefit disparities when they are identified to ensure compliance with the equal pay and discrimination laws
- How often wages and benefits are evaluated, and
- The approach the business takes in determining the level of wages and benefits to pay its employees (with acceptable approaches including, but not being limited to, a wage and salary survey)
Even if the IDOL fails to assign a business a certification or recertification deadline, the IDOL’s failure to provide a deadline is only a mitigating factor in determining an employer’s violation for failure to comply, and the employer is not exempted from compliance. But note: if the employer has not yet suffered any penalties for violating the IEPA’s reporting and certification requirements, an employer who inadvertently fails to file an initial application or recertification is provided 30 calendar days by the IDOL to submit the application or recertification. Still, covered employers would be wise not to be left in the dark and to contact the IDOL if they should–but don’t–hear from the IDOL with deadlines. Employers who haven’t already should start compiling data to report now in case they’re first in line for notification by IDOL, and should contact their Baker McKenzie employment attorney for assistance with advice on the process.
Employers Who Rely only on AI to Choose In-Person Interviews Must Report Demographic Data
Some employers will have even more demographic data reporting obligations. As of January 1, 2022, under amendments to Illinois’ Artificial Intelligence Video Interview Act (AIVIA) (Public Act 102-0047), employers who rely solely on AI analysis of video interviews to determine whether an applicant will be chosen for an in-person interview must collect and report demographic data. Employers must collect and report:
- the race and ethnicity of applicants who are not provided with the opportunity for an in-person interview after the use of AI analysis, and
- the race and ethnicity of applicants who are hired.
The demographic data must be reported to the Department of Commerce and Economic Opportunity every year by December 31, with the report to include the data collected in the 12-month period ending on November 30 preceding the filing of the report. The Department will analyze the data and report any data disclosing a racial bias in the use of AI to the Governor and General Assembly.
As a refresher, the AIVIA went into effect in January 2020, requiring employers who use an AI tool to analyze video interviews of applicants for positions based in Illinois to meet both notice and consent, privacy and deletion rights requirements. Employers who are covered by the amendment should start compiling data now to ensure compliance with the December 31 reporting date.
And There Will Be Even More Reporting…Next Year! Beginning January 1, 2023, Illinois Employers Must File Demographic Data with the Illinois Secretary of State
Looking ahead to 2023 (so that Illinois employers can start to prepare now), recent amendments to the Illinois Business Corporations Act (Public Law 101-0656) will require certain Illinois corporations (or corporations doing business in Illinois) to include demographic data when they file their annual corporation report with the Illinois Secretary of State.
Beginning January 1, 2023, Illinois corporations required to file EEO-1 reports with the EEOC will have to submit to the Illinois Secretary of State demographic data substantially similar to the data included in Part D of the EEO-1 report. This currently includes data on gender, race, and ethnicity of the employee force, broken down by nine job categories (first/mid-level officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers).
Though the EEO-1 report filed with the EEOC is largely confidential, the Illinois Secretary of State will be required to publish this demographic data and make it publicly available on its official website within 90 days of receiving a company’s annual report (or as soon as practicable thereafter). Employers should be wary: with this published data, parties will be able to compare the gender and racial makeup of employees by varying job categories of corporations registered in or qualifying to do business in Illinois–regardless of whether those individuals included in the comparison actually work in Illinois. Employers should consult with counsel now to determine the best way to handle these reporting requirements in the future.
Employers Have a Little Leeway to Discuss Compensation History with Applicants–with Caveats
An amendment to the IEPA effective January 1, 2022 (Public Act 102-0277) gives employers a little more leeway in discussing compensation history with applicants. The change explicitly permits discussions regarding unvested equity or deferred compensation that the applicant would forfeit or have canceled by virtue of resigning from their current employer when an employer is discussing the applicant’s expectations regarding wage, salary, benefits or other compensation. If the applicant voluntarily discloses this information, the employer can request that the applicant verify the aggregate amount through submission of a letter from the applicant’s current employer or the entity that administers the funds (the applicant’s choice) verifying the amount.
As a quick refresher, under the IEPA employers cannot require employees to enter contracts prohibiting them from discussing their wages, salary, benefits or other compensation (with the exception of Human Resources Professionals, who cannot disclose other employees’ information without an employee’s prior written consent). In addition, an employer cannot screen job applicants based on current or past wages or salaries, request or require a wage or salary history from the applicant in order for the applicant to be considered for an interview or for employment, or request or require that an applicant disclose wage or salary history as a condition of employment. However, employers can ask candidates about salary expectations (including, under this amendment, unvested equity or deferred compensation the applicant would forfeit). In addition, there is no violation for a candidate’s voluntary and unprompted disclosure of wage information–as long as the employer does not consider or rely on the disclosure when making hiring or employment decisions. Employers should still use caution and ensure employees who discuss compensation expectations with applicants have clear boundaries for what is and is not acceptable in those conversations.
Employers Must Implement the Illinois Minimum Wage
Increase–$12 / hour
On January 1, 2022, the Illinois minimum wage increased to $12 / hour for non-tipped employees, $7.20 / hour for tipped employees and $9.25 / hour for individuals under the age of 18 working less than 650 hours per calendar year. Illinois’ minimum wage will gradually climb until it reaches $15 / hour for non-tipped employees and $9 / hour for tipped employees on January 1, 2025. Cook County’s minimum wage for tipped workers also increased on January 1, 2022 to $7.20 / hour to align with the Illinois minimum wage.
As a reminder, the Chicago minimum wage is currently $15 / hour for employers with 21 or more employees and $14 / hour for smaller businesses. Cook County’s minimum wage is $13 / hour for non-tipped workers for businesses with 4 or more employees (but many municipalities have opted out).
A couple of points to remember:
- Individuals under the age of 18 who work more than 650 in a calendar year must be paid the over-18 wage
- Tipped employees may be paid 60% of the hourly minimum wage, but they must make the minimum wage limit after tips or the employer has to make up the difference
Employers should communicate with payroll providers to ensure they are aware of the changes and are applying them as applicable.
Employers Must Stay Vigilant When Disclosing Disciplinary Reports–Employees Have a New Cause of Action under the Personnel Record Review Act (PRRA)
Employers should be careful to follow the rules on disciplinary report disclosure notification to a tee. Effective January 1, 2022, amendments to the PRRA (Public Act 102-0562) provides employees aggrieved by a disclosure of the employee’s disciplinary report in violation of the PRRA with the option of either filing a complaint with the Director of Labor or filing an action in court within 3 years after the violation.
As a reminder, the PRRA requires an employer or former employer to provide written notice to the employee upon disclosure of a disciplinary report, letter of reprimand, or other disciplinary action to a third party (unless the notice requirement is waived by the employee as part of an employment application with another employer, required for a legal proceeding, or requested by a government agency as part of a claim by the employee or a criminal proceeding). The written notice must be sent by first class mail to the employee’s last known address and must be mailed on or before the day the information is disclosed (or if the request for information is a FOIA request, the employer must provide notice of disclosure by email, if available). However, the notice provisions of the PRRA do not invalidate or interfere with any applicable collective bargaining agreement. Employers should train HR and any other employees who handle personnel records on the update to the law, and ensure policies and procedures are in place to comply with the PRRA’s notification requirements.
Be Aware of the New Leave Entitlements for Employees under the Victims’ Economic Security and Safety Act (VESSA)
The new year also brings new employee leave entitlements under amendments to VESSA (Public Act 102-0487), and employers should take note. Effective January 1, 2022, VESSA–which entitles employees who are victims of domestic violence, sexual violence, or gender violence (or whose family or household members are victims of such violence) to take unpaid leave to address issues related to the violence–expanded the definition of “family or household member” and the types of violence qualifying for leave.
- The definition of “family or household member” now includes civil union, grandparent, grandchild, sibling, “and any other individual whose close association with the employee is the equivalent of a family relationship as determined by the employee.”
- In addition to leave for domestic violence, sexual violence and gender violence, the law now allows for leave related to a “crime of violence,” which can include (but is not limited to) sex offenses, harassment and obscene communications, assault, and armed violence.
Under VESSA, employees may take up to 12 work weeks of unpaid time off during any 12-month period (with the number of available weeks depending on the size of the employer) to do things like obtain victim services or counseling, seek medical attention, or obtain legal assistance, to name a few. Employers must make reasonable accommodations in the workplace and are prohibited from discrimination in terms of hiring, firing, income, promotion, harassment and retaliation against VESSA-qualifying employees. Employers should not only be aware of these changes, but also train management and HR on the new leave entitlements.
“Association” Disability Discrimination is Now Illegal under the IHRA
As of January 1, 2022, under amendments to the IHRA (Public Act 102-0419), Illinois now specifies that discrimination based on a disability includes unlawful discrimination against an individual because of their association with a person with a disability. This is similar to the “association” provision of the Americans with Disabilities Act (which prohibits discrimination against a person, whether or not they have a disability, because of their known relationship or association with a person with a known disability). Employers should update written policies and train all employees on the new standard.
What’s on the horizon for Illinois employers?
Employers should also keep an eye out for developments regarding these hot topics.
DOJ’s Criminal Prosecution of Employer Wage-Fixing and No-Poach
Employers beware: the US Department of Justice (DOJ) is pursuing companies and executives alleged to have fixed wages or limited worker mobility as criminal rather than civil matters, which means possible jail time for defendants.
Recently, the US District Court for the Eastern District of Texas endorsed the DOJ’s ability to criminally prosecute wage-fixing claims in its November 29, 2021 opinion in United States v. Jindal, a prosecution based on alleged wage-fixing of physical therapists’ and PT assistants’ salaries. The Court held that wage-fixing is a form of price-fixing, found that courts have repeatedly held price fixing as per se illegal under the Sherman Act, and allowed the wage-fixing prosecution to proceed. The DOJ also has cases pending in several other jurisdictions (including Colorado, Nevada and Connecticut), with no apparent plan to change course. Employers should review their agreements to ensure they are in compliance.
When Do Illinois Biometric Information Privacy Act (BIPA) Claims Accrue, and Will BIPA Be Preempted by Workers’ Comp?
The question of whether BIPA claims accrue each time a person’s biometric information is scanned or transmitted without informed consent–or just the first time–is set to be reviewed by the Illinois Supreme Court in the case Cothron v. White Castle System, Inc. On December 20, 2021, the Seventh Circuit certified the question to the Illinois Supreme Court to determine the issue of whether claims asserted under Sections 15(b) (collection of biometric data) and 15(d) (disclosure of biometric data) of BIPA accrue only once–when biometric data is initially collected or disclosed–or each time biometric data is collected or disclosed. To date, there has been no ruling by the Illinois Supreme Court, but employers will want to watch since the result could heavily impact a statute of limitations defense, as well as damages calculations under BIPA.
The other big BIPA question is whether the Illinois Supreme Court will put boundaries on BIPA claims by ruling they are preempted by the Illinois Workers’ Compensation Act. The Court heard argument on the issue in McDonald v. Symphony Bronzeville Park LLC in September 2021, and has not yet issued a ruling.
Illinois employers have a lot on their plate for 2022. For help traversing the new Illinois laws and keeping an eye on what’s on the horizon, contact your Baker McKenzie employment attorney.