A week ago, Illinois became the latest state to mandate pay transparency in job postings, following in the footsteps of other states like New York, Colorado, California, Hawaii, and beyond.
Beginning Jan. 1, 2025, the Illinois Equal Pay Act will force employers with more than 15 workers to include pay ranges in their job posts. Notably, unlike in other states, Illinois’ law does not require that companies must include salary and benefits in the post itself so much as to make the information readily available. The act will thus allow employers to include a hyperlink to a public webpage that will show relevant pay scale and benefits.
Another important provision is that the new law will apply to roles beyond those that will be performed in Illinois. It also encompasses remote positions that entail a worker reporting to a supervisor or office in Illinois.
The upcoming rule has still more mandates: If a job is available to internal workers as a promotion, then an employer must notify people inside the company no later than 14 days after an external job post goes live. Plus, if an employer uses a third-party to publish a post, it must give that party the comp and benefits info for that role, which the third party must include in the ad.
A violation of the law includes $500 for a first offense, $2,500 for a second one, and $10,000 for each offense thereafter.
It will be worth watching if the implementation of the law yields some of the same unintended consequences as elsewhere. For example, after New York City required salary ranges in posts, a number of ads began displaying ridiculous pay ranges. CitiGroup, for example, listed a job with a salary of $0 – $2,000,000. Granted, it may have been due to an internal error rather than an intentional means to skirt the law.
Still, the financial giant’s job post was not the only one of its kind. Whether some employers acted in error or in bad faith, the result was still a bunch of confusing job posts that frustrated candidates.
Then, too, not everyone has supported the move toward greater transparency. The California Chamber of Commerce labeled the Golden State’s proposed law at the time as a “job-killer.” And the Society for Human Resource Management (SHRM) cautioned that such laws can cause “wage compression.”
Returning to Illinois’ new law, because it includes remote jobs, it will likely force employers to ponder the perennially vexing issue of compensating based on location. That is, should a company base salaries according to where its workforce is located?
As cited in a prior ERE article, “Whatever formula [employers] use, how organizations pay their remote employees impacts the caliber of people they attract and retain and company culture. A location-based strategy keeps salaries competitive and cost-effective. A value-based strategy pays employees according to market rate and experience level. There is no one-size-fits-all answer. Many factors determine which compensation strategy a company should use to compensate its employees.”
