EQUAL PAY ACT OF 2003
REGULATIONS RELEASED


The Equal Pay Act of 2003 prohibits Illinois employers with four or more employees from discriminating against employees based on gender in the amount and payment of wages. Specifically, the law prohibits covered employers from paying unequal wages to men and women for doing the same or substantially similar work, requiring equal skill, effort, and responsibility, under similar working conditions for the same employer in the same county. The Act became effective January 1, 2004.

The Act contains exceptions for wage differences based upon a seniority system, a merit system, a system measuring earnings by quantity or quality of production or factors other than gender. The Illinois Department of Labor (IDOL) is responsible for enforcement of the Act. Any current or former employee may file a complaint with the IDOL within 180 calendar days from the date an individual learns of the alleged violation by an employer.

The IDOL has recently released the administrative regulations which correspond to the Act. The regulations outline the procedures and timelines for filing complaints, responding to allegations and conducting investigations. The regulations also outline the IDOL’s course of action options at the conclusion of any investigation. If the IDOL finds reasonable cause that a violation of the Act occurred, the Department will either recommend a voluntary settlement between the parties or recommend the complainant file a civil lawsuit. If however the IDOL determines there is no reasonable cause to believe that a violation has occurred, the Department will dismiss the complaint.

Of note, the regulations contain several definitions of terms used in the Act which may assist Illinois employers with compliance. In particular, the regulations define “merit system” to mean an established, bona fide, uniform and objective system that rewards an employee with promotion, bonus, increased pay or other advantages based on competence, expertise, proficiency and human relations. We recommend that you carefully review your employee performance evaluation guidelines and forms to ensure they are in compliance with this definition.

Also, the regulations define “wages” which, for purposes of compliance with the Act, means any compensation made to an employee as remuneration for employment regardless of whether paid periodically or deferred until a later date. Compensation includes but is not limited to the following:
  • wages (hourly employees)
  • salary (salaried employees)
  • vacation pay
  • sick leave
  • holiday pay
  • overtime pay
  • premium pay
  • health insurance
  • life insurance
  • disability insurance
  • mmission
  • draw payments
  • pension
  • profit sharing
  • expenses
  • bonus
  • uniform cleaning allowance
  • hotel accommodations
  • use of vehicle
  • gasoline allowance
  • cafeteria plan
  • educational benefits
In light of this, we recommend that you review and compare employee pay in terms of total compensation, which includes all financial and fringe benefits. This is a key compliance issue because employees in similar positions who appear to be receiving equal salaries may actually be receiving unequal compensation once all benefits and other reimbursements are calculated together.

If you have any questions about whether or not your organization is in compliance with the Equal Pay Act and its regulations, please contact Nancy Armatas at (312) 922-4447.