Illinois Pay Transparency and Equity Laws: 2025 Employer Compliance Guide

Illinois is leading the charge in workplace equity with new pay transparency requirements. The recent amendments to the Illinois Equal Pay Act of 2003 introduce clear expectations for employers to disclose pay scales and benefits in job postings. These changes aim to create a fairer hiring process and reduce wage gaps across the state.

Starting January 1, 2025, businesses with 15 or more employees must include specific compensation details in all job postings. The new law also ensures internal employees have the opportunity to apply for promotions by requiring employers to notify their current workforce about open positions. For HR teams and business owners, these updates signal a shift toward greater accountability and transparency in recruitment and retention practices.

Understanding Illinois' new pay disclosure rules is not just about following the law—it's about fostering trust with employees and candidates. Transparent pay practices help build a workplace culture where fairness and equity are the foundation of every hiring and compensation decision.

Overview of Illinois Pay Transparency Law

The Illinois Equal Pay Act of 2003 has undergone key updates to promote wage transparency and equity. Signed into law in August 2023, the amendments under HB 3129 require employers to include pay scale and benefits information in job postings starting January 1, 2025. This applies to roles physically performed in Illinois or positions where the employee reports to a supervisor or office located in the state.

Employers with 15 or more employees must disclose salary ranges and benefits, either directly in the job posting or via a hyperlink to a publicly accessible webpage. Additionally, the law mandates that employers notify current employees of internal promotional opportunities within 14 days of posting an external job opening. This ensures current employees have equal access to advancement opportunities, creating a more equitable workplace.

These updates are part of Illinois' broader efforts to address pay disparities based on gender, race, and other protected characteristics. By requiring transparency in compensation, the state aims to narrow wage gaps and provide job seekers and employees with the information they need to make informed decisions about their careers.

People Also Ask:

• Does Illinois have salary transparency laws?

  • Yes, Illinois enforces salary transparency laws under the Illinois Equal Pay Act. Beginning January 1, 2025, employers with 15 or more employees must include pay scales and benefits in job postings.

Who Must Comply

The Illinois pay transparency and equity state laws apply to employers with 15 or more employees. This count includes full-time, part-time, and temporary workers, so even smaller organizations with mixed staff structures may fall under the threshold. Every employer meeting the size requirement must include pay scale and benefits information in all relevant job postings.

Employers outside Illinois are not automatically exempt. Out-of-state businesses must comply if the position involves Illinois in any capacity. For example, remote roles performed partially in Illinois or positions managed by supervisors, offices, or worksites based in Illinois are covered under the regulations.

Covered Positions

Compliance hinges on where the work is performed or where the reporting structure is based. A position qualifies as covered if it:

• Involves work performed in Illinois: This includes hybrid and remote roles where any part of the job is completed within state boundaries.

• Reports to Illinois-based leadership: Jobs physically located outside Illinois but managed by supervisors or offices in the state must also meet the requirements.

Employers need to evaluate each role's location and reporting hierarchy to confirm whether the position is subject to the law. Missteps in determining coverage could lead to compliance issues and potential penalties.

Required Pay Scale and Benefits Disclosure in Illinois

Illinois employers must now take a more transparent approach to job postings. The new regulations require clear and accurate disclosure of both pay scale and benefits information. This shift is designed to give job seekers a better understanding of what a role offers before they apply.

Defining "Pay Scale and Benefits"

The pay scale refers to the salary or hourly wage range an employer reasonably expects to offer for a particular position. Employers can base this range on pre-set pay scales, the role's budget, or the current pay of employees in similar jobs.

Benefits must be outlined in general terms but should still provide enough clarity for candidates to understand what's included. Examples of benefits that need to be disclosed:

• Health coverage: Medical, dental, or vision insurance options.

• Paid leave: Vacation time, sick leave, or other employer-provided time off.

• Retirement plans: Any 401(k) options, pensions, or employer-matched contributions.

• Additional incentives: Bonuses, stock options, or other performance-based rewards.

The goal is to ensure candidates have a full picture of the compensation package without digging for details.

Methods to Include Pay Scale and Benefits

Employers can meet the requirements in two main ways:
1. Direct placement in job postings: Clearly list the pay range and benefits within the text of the posting itself.
2. Hyperlinked disclosures: Provide a direct link to a publicly accessible webpage where candidates can find the required pay and benefits information.

Employers who use third-party job boards must ensure that pay scale and benefits information is either included in the posting or linked appropriately. Both the employer and the third-party platform can be held accountable if this information is missing, so proper coordination is crucial.

Good Faith Pay Ranges in Illinois

The salary or wage range disclosed must be provided in good faith. This means the range should reflect what the employer genuinely intends to pay for the position. Employers need to avoid inflating or understating the range, as doing so could lead to compliance violations and erode trust with candidates. Using reliable data, such as internal budgets or market benchmarks, can help ensure pay ranges are accurate and defensible.

People Also Ask:

• What is the new pay law in Illinois?

  • Starting January 1, 2025, Illinois requires employers with 15 or more employees to include pay scales and benefits descriptions in job postings to ensure transparency and fairness in hiring.

Notification, Posting, and Recordkeeping Requirements in Illinois

Staying compliant with Illinois pay transparency and equity state laws requires more than just updating job postings. Employers must also follow specific rules for notifying internal employees about opportunities and maintaining detailed records to demonstrate compliance. These measures aim to create fairness and accountability at every step of the hiring and promotion process.

14-Day Rule for Internal Job Notifications

Employers must notify current employees of all promotional opportunities no later than 14 calendar days after an external job posting is made. This means internal candidates should have an equal chance to apply for open positions before hiring decisions are finalized. Notifications can be shared through company-wide emails, internal job boards, or other established communication channels. The method isn't as important as ensuring every eligible employee is informed within the required timeline.

Differences Between Internal and External Postings

Internal job postings are directed exclusively at current employees, while external postings are intended for outside candidates. Employers are not required to create external postings unless they choose to recruit publicly. However, when an external posting exists, the internal notification must follow promptly to ensure fairness in the process. This applies to full-time, part-time, hybrid, and remote roles connected to Illinois.

Required Record Retention

Employers must keep clear, organized records of all job postings, pay scales, and benefits disclosures for at least five years. Records should include:

• Copies of every internal and external job posting.

• Documentation of disclosed pay ranges and benefits descriptions.

• Communications related to promotional opportunities shared with current employees.

Maintaining these records is not optional. They serve as evidence of compliance if an audit or investigation arises. Failure to retain accurate records could result in penalties, so it's important to implement a reliable system for storing and accessing this documentation.

Third-Party Recruiter Responsibilities

Employers who use third-party recruiters or job boards must ensure those partners include pay scale and benefits information in job postings. Employers are required to provide the necessary details—such as salary ranges and benefits descriptions—to the third party. If a recruiter or job board omits this information, they may be held liable unless they prove the employer failed to supply it. Clear communication between employers and recruitment partners reduces the risk of non-compliance.

Preventing Retaliation Against Workers

Illinois pay transparency and equity state laws protect employees from retaliation for exercising their rights. Workers are free to ask about wages, discuss pay openly, or file complaints without fear of punishment. Employers cannot penalize individuals for raising concerns or participating in inquiries related to pay practices.

To avoid retaliation claims, employers should prioritize manager and HR training. Teams should understand the protections in place and know how to handle pay-related discussions appropriately. Additionally, maintaining thorough documentation of all communications related to job postings and promotions helps ensure transparency and can protect the organization if disputes arise. A proactive approach fosters trust and fairness, aligning the workplace with the values behind Illinois' transparency laws.

Enforcement, Complaints, and Penalties in Illinois

The Illinois Department of Labor (IDOL) plays a direct role in enforcing Illinois pay transparency and equity state laws. IDOL ensures employers meet the requirements for transparent pay disclosures and investigates any complaints tied to non-compliant job postings. Employers should anticipate swift action if issues arise, as compliance is not optional.

How the Illinois Department of Labor Investigates Complaints

Complaints about missing pay scale or benefits information in job postings are reviewed by IDOL. Individuals submitting complaints—whether employees, job seekers, or external observers—must include specific evidence such as a screenshot, link, or photo of the posting. Once a complaint is received, IDOL alerts the employer and sets a clear deadline for correction. Prompt updates to the job posting are required to avoid penalties or further enforcement.

Penalties Based on Posting Status

Penalties from IDOL depend on whether the job posting in question is active or inactive during the investigation. Employers with active postings missing required pay or benefits disclosures face immediate fines. Inactive postings, which have either been corrected or removed, may result in reduced penalties, depending on the circumstances. Repeat violations lead to higher fines, reflecting the state's focus on deterring ongoing non-compliance.

Time Limits for Filing Complaints

Complaints must be filed with IDOL within one year of the alleged violation. This deadline emphasizes the importance of timely action. Employers should regularly audit job postings to prevent errors, while employees or job seekers should report violations as soon as they occur. Clear documentation is key for both parties.

Corrective Action and Consequences of Repeat Offenses

IDOL allows employers to resolve issues through corrective action during the initial stages of an investigation. However, businesses that ignore warnings or repeatedly violate the law face escalating consequences. Fines increase with repeated offenses, and non-compliance can harm an organization's reputation. Proactive compliance and consistent monitoring of job postings reduce risks and ensure adherence to Illinois pay transparency and equity state laws.

People Also Ask:

• What are the requirements for the Workplace Transparency Act in Illinois?

  • Employers must include pay scales and benefits in job postings, ensure internal job promotion transparency, and avoid retaliation. The Illinois Department of Labor enforces these requirements through investigations and penalties.

Illinois Employer Action Steps for Compliance

Preparing for Illinois pay transparency and equity state laws requires clear, actionable steps to ensure compliance and maintain fairness across hiring and compensation practices. These laws are more than a regulatory requirement—they are a chance to demonstrate accountability and build trust with both employees and candidates.

Conduct a Comprehensive Pay Audit

Start by reviewing all compensation practices across your organization. Examine salary bands, hourly wages, merit increases, bonuses, and other forms of compensation to confirm consistency and fairness.

• Use market data: Compare your pay ranges with industry benchmarks to identify any discrepancies.

• Examine similar roles: Look for pay consistency across employees with comparable job responsibilities, experience, and qualifications.

• Document pay decisions: Create clear justifications for any differences in compensation, such as performance-based increases or location adjustments.

A well-executed audit protects your organization from compliance risks and ensures equitable pay practices.

Standardize Job Posting Formats

Develop a consistent format for job postings that includes all legally required information. A standardized template simplifies compliance and ensures accuracy across all postings.

Include the following in every job posting:

• Salary or wage range: Clearly state the minimum and maximum pay for the position.

• General benefits summary: Highlight key offerings such as health insurance, retirement plans, and paid time off.

• Compliance disclaimer: Include a brief note explaining the inclusion of pay and benefits information to meet state transparency mandates.

Share the template with external recruiters or job boards to maintain uniformity, regardless of where the job is posted.

Establish Recordkeeping Systems

Implement a reliable system to organize and retain records of job postings, pay scales, and benefits information. Illinois pay transparency laws require these records to be maintained for at least five years.

Steps to streamline recordkeeping:
1. Centralize documentation: Use a single repository to store all postings, internal communications, and related data.
2. Track updates: Record the posting dates, revisions, and removal dates for every position.
3. Log internal notifications: Keep evidence of when and how promotion opportunities were shared with employees.

Having a clear, well-maintained system simplifies audits and ensures compliance with retention requirements.

Train Key Teams on Compliance

Equip HR professionals, recruiters, and managers with the knowledge needed to meet transparency obligations. Training ensures consistent practices and minimizes the risk of missteps.

Focus training efforts on:

• Disclosure requirements: Teach teams how to include accurate pay ranges and benefits in postings.

• Fair communication: Prepare managers to answer compensation-related questions confidently and appropriately.

• Anti-retaliation policies: Reinforce protections for employees who discuss wages or report concerns.

Regular training sessions keep compliance top of mind and support alignment across teams.

Use Centralized HR Software

Leverage technology to manage job postings, track pay ranges, and store records efficiently. A centralized platform streamlines processes, reduces manual errors, and keeps everything organized.

Key benefits of HR software include:

• Automated pay range assignments: Ensure consistent compensation disclosures for each role.

• Posting management: Monitor all active, expired, or archived job postings in one place.

• Secure storage: Safeguard records with easy access when needed for audits or inquiries.

Centralizing these processes saves time and reduces the complexity of compliance.

Prioritize Pay Equity

Evaluate compensation structures to address any unintentional disparities. Pay equity goes beyond compliance—it reflects a commitment to fairness and transparency.

• Analyze pay trends: Look for patterns that could indicate inequities, such as gaps between demographic groups.

• Define pay philosophy: Clearly outline how salaries are determined, including criteria like education, experience, and performance.

• Communicate openly: Share pay structures and decision-making processes with employees to build trust.

Transparent practices create an environment where employees feel valued and confident in their compensation.

Navigating Illinois' new pay transparency and equity laws can feel overwhelming, but proactive compliance is essential for building trust and fairness in your workplace. We're here to help you streamline the process and maintain compliance with confidence. Book a demo today to learn how our centralized HR platform can simplify your path to transparency.