Illinois’ New Salary History Ban Impacts Nonprofits

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On September 29th Illinois’ new law prohibiting employers and nonprofits from asking job applicants about their salary history went into effect.

Illinois now joins 18 other states with similar laws, including New York, Massachusetts, California, Washington, and Alabama.

Your organization can still provide information about a position’s compensation to an applicant or discuss what the applicant expects to make with respect to the position, but it does prevent your nonprofit from:

  • Screening job applicants based on their current or prior wages or salary histories, including benefits or other compensation, by requiring that the wage or salary history of an applicant satisfy minimum or maximum criteria.  
  • Requesting or requiring a wage or salary history as a condition of being considered for employment, as a condition of being interviewed, as a condition of continuing to be considered for an offer of employment, or as a condition of an offer of employment or an offer of compensation.  
  • Requesting or requiring an applicant to disclose wage or salary history as a condition of employment. 
  • Seeking the wage or salary history, including benefits or other compensation, of a job applicant from any current or former employer.  
  • Requiring employees to sign a contract or waiver prohibiting them from discussing compensation with other employees

With the new ban in place, your organization can:

  • Seek an applicant’s compensation history if it is public record
  • Use current salary information if the applicant is a current employee applying for a different position within the organization

The law enables employees to file a lawsuit to enforce the amended law and employees can seek damages up to $10,000, plus attorney’s fees and costs. Employees deemed underpaid due to their sex may also be entitled to uncapped compensatory.

Nonprofits must also be prepared to explain pay differential between employees performing “substantially similar” jobs.

Here’s a few action items

  1. Review your application forms and retrain recruiters and other personnel involved in the hiring process.
  2. Review your nonprofits policies and employment agreements to ensure they are compliant.
  3. Review and implement standard compensation packages based upon position, experience, and education.
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