We share with you the following important updates regarding the Illinois General Assembly Spring Legislative Session, which include budget-related bills (the “Grand Bargain”) and three bills which have significant impact on Illinois labor and employment laws.
The Grand Bargain
As you know, Illinois has gone two years without a budget. In an effort to pass a balanced budget, the Illinois legislature introduced the “Grand Bargain,” which is a series of budget-related bills.
On May 17, 2017, the Illinois Senate voted through several pieces of this Grand Bargain, including a fix for state pension systems, expansion on gambling, a change in the school funding formula, changes to state purchasing rules, reform on local government consolidation and borrowing 7 billion dollars to pay past due state bills (which total twice that amount). A bill that would have implemented a two-year property tax freeze failed. The Senate adjourned for the day Wednesday without voting on any tax hike measures included in the Grand Bargain. The remaining items in the Grand Bargain were not voted on by the Senate on Thursday. One of these remaining items would increase the corporate tax rate from 5.25 percent to 7 percent and the personal income tax from 3.75 percent to 4.95 percent.
The Senate approved a $36.5 billion budget plan, but the vote to implement the spending cuts contained in the plan failed. A bill on workers compensation changes could be approved this week, as Democrats and Republicans are close to reaching an agreement. The reforms to workers compensation could be an overhaul of the current system in order to cut costs for businesses when an employee is injured in the workplace. Time is running short for negotiations to finalize the Grand Bargain as the General Assembly will adjourn May 31.
Illinois House Bill to Amend the Equal Pay Act of 2003
House Bill 2462, which was passed by the House on April 26, 2017 and by the Senate Labor Committee on May 10, amends the Equal Pay Act.
This bill has added several components barring employers from:
- Screening job applicants based on their wage or salary history.
- Requiring applicants to disclose their salary history, benefits or other compensation.
- Requiring an employee to sign a contract that would prohibit the employee from disclosing information about the employee’s wages.
This bill also creates a private right of action against employers who violate the provisions, allowing job applicants to sue the employer for compensatory damages, punitive damages, and injunctive relief. Costs and attorney’s fees may be allowed by the court.
Supporters of the bill state that some employers have used wage history information to reduce wages for women and this bill will help close the pay gap between men and women. The bill is likely to pass the Senate. The bill passed the House by a veto-proof majority and most likely will have the support of Governor Rauner.
Paid Leave in Illinois
As we reported earlier, in July of 2016, Chicago passed an ordinance requiring employers to provide 5 days of paid leave to its employees. Cook County passed a similar ordinance in November of 2016. Both these ordinances become effective July 1, 2017.
Of vital news to Illinois employers is that recently, the Illinois House passed a bill entitled, the Healthy Workplace Act, which expands on the Chicago and Cook County leave efforts.
If passed, the Healthy Workplace Act will require employers with at least one employee to provide paid sick days to its full-time and part-time employees as follows:
- Employees working 40 hours a week would be entitled to earn and use a minimum of 5 paid sick days during a 12-month period.
- Employees working less than 40 hours would earn paid sick days on a pro rata basis.
- Paid sick days would begin accruing at the commencement of employment or on the effective date of the Act, whichever is later.
- An employee may begin using a sick day 180 days following commencement of employment or 180 days following the effective date of the Act, whichever is later.
Paid sick leave shall be provided to employees for the following reasons:
- to care for the employee’s own illness or injury;
- to care for the employee’s family members;
- attend medical appointments;
- to care for a child whose school is closed due to a public health emergency or use if the employee’s workplace is closed due to a public health emergency; or
- use if the employee or a family member is the victim of domestic violence.
However, because of the lack of support of the bill from the Republican lawmakers, there is speculation that Governor Rauner may have the political cover to veto the bill.
Collective Bargaining Freedom Act
Currently in a unionized Illinois workplace, workers must pay fees to the union to keep their jobs if a collective bargaining agreement requires it. But, in late 2015, the Village of Lincolnshire became the first Illinois municipality to enact a local Right-to-Work ordinance. (Right-to-Work prevents workers from being fired for choosing not to join or pay fees to a union.) Unions sued the Village, arguing that federal law only allows Right-to-Work to be enacted on a statewide basis, not locally. A federal judge ruled that the ordinance is preempted under Section 14(b) of the National Labor Relations Act. This lawsuit is on appeal in the 7th Circuit.
On April 27, 2017, the Illinois Senate passed a bill intended to quash the Illinois local “Right to Work” efforts. This bill would prohibit local governments in Illinois from passing or enforcing local Right-to-Work laws. This bill passed the Senate on April 27, 2017 and is now before the House Labor and Commerce Committee. Because Governor Rauner has campaigned for local right-to-work zones, it is predicted that he will veto the bill, which would then be subject to Legislative override efforts.
Pappas O’Connor will keep you apprised of significant new developments in these legislative endeavors. In the meantime, Chicago and Cook County employers should be prepared to modify their employment policies to provide for the new paid sick leave provisions by July 1, 2017 and to ensure human resource professionals and managers are aware of the new policies. All Illinois employers should be prepared to act promptly on the similar state law provisions that may soon be enacted and should be prepared to modify their job applications and interview protocols, and educate their human resource personnel and managers, to comply with the salary information restrictions in the Equal Pay Act Amendment that appears destined to become law in the near future.