With the calendar flipping to December, businesses should take stock of their employment policies and practices in preparation for the new year. Below we identify a few issues (other than COVID-19-related issues) that employers should have on their radar as 2021 comes to a close.
Sexual Harassment Training
There are only a few weeks left to conduct the required annual sexual harassment prevention training.
In 2019, Illinois enacted the Workplace Transparency Act (WTA), which, among other things, requires all employers in the state to conduct yearly sexual harassment prevention training. Employers may use the model training program developed by the Illinois Department of Human Rights or create their own presentation. Either way, the training must include:
- An explanation of sexual harassment;
- Examples of unlawful sexual harassment;
- A summary of relevant federal and state statutory provisions concerning sexual harassment, including remedies available to victims; and
- A summary of employers' responsibilities in the prevention, investigation, and corrective measures of sexual harassment.
Restaurants and bars have additional training requirements under the WTA.
Failure to conduct the yearly training can result in the imposition of civil penalties. With the end of the year fast approaching, businesses that have not yet conducted their 2021 training should make plans to do so as soon as possible and should document their employees' participation for inclusion in personnel files.
New Restrictive Covenant Law
Effective January 1, 2022, amendments to the Illinois Freedom to Work Act will overhaul the landscape of restrictive covenants in Illinois. Moving forward, non-compete agreements will be unenforceable unless the employee earns (or is expected to earn) at least $75,000 per year, and non-solicitation agreements will be unenforceable unless the employee makes (or is expected to make) at least $45,000 per year. These salary thresholds will increase over time as outlined in the Act.
Additionally, restrictive covenants entered into after the new year will be void unless:
- the employee receives adequate consideration;
- the covenant is ancillary to a valid employment relationship;
- the covenant is no greater than is required for the protection of a legitimate business interest of the employer;
- the covenant does not impose undue hardship on the employee; and
- the covenant is not injurious to the public.
Adequate consideration means that (1) the employee worked for the employer for at least two years after signing a restrictive covenant, or (2) the employer otherwise provided consideration adequate to support a non-compete or non-solicitation agreement, which can consist of a period of employment plus additional professional or financial benefits or merely professional or financial benefits by themselves.
Notably, the law only applies to agreements entered into after the new year. It does not retroactively apply to existing agreements unless revisions or edits are made to those existing agreements in 2022 and beyond.
Additionally, employers must give advance written notice of a restrictive covenant, which must: (1) advise the employee to consult with an attorney, and (2) include a copy of the covenant at least 14 days before the employee's employment begins or provide the employee with at least 14 days to review the covenant.
If an employer attempts to enforce a restrictive covenant and fails, the employee can recover his/her attorneys' fees.
The amendments include other restrictions as well, so employers should be sure to familiarize themselves with the law and update their standard restrictive covenant agreements accordingly.
Minimum Wage Increase
As of January 1, 2022, Illinois' minimum wage will increase from $11 per hour to $12 per hour. Likewise, the tipped minimum wage will go up from $6.60 to $7.20 per hour. The minimum wages are set to increase again in 2023, 2024, and 2025, when they will reach $15 and $9 per hour, respectively.
Chicago's minimum wage for employers with at least 22 employees increased to $15 per hour in July 2021. It is not set to go up again until July 1, 2022, at which point it will increase proportionately with the Consumer Price Index.
Criminal Conviction Protection
The Employee Background Fairness Act, which was signed into law in March, made it a civil rights violation to use a conviction record in an employment-related decision, unless (1) there is a "substantial relationship" between the criminal offense and the position, or (2) it would involve an "unreasonable risk" to property or the safety of a specific individual or the general public.
Employers who wish to take an adverse action based on a conviction record must also engage in an "interactive" process with the employee to understand the nature of the conviction and must also comply with a notice requirement by advising the employee of his/her rights, both before and after the final decision is made.
Equal Pay Act
2021 saw multiple amendments to the Illinois Equal Pay Act (EPA). The EPA now requires private employers with more than 100 employees to obtain an equal pay registration certificate from the Illinois Department of Labor (IDOL) by submitting certain wage records and an equal pay compliance statement. The initial certification deadline will be set by the IDOL sometime between March 24, 2022 and March 23, 2024. Employers will be required to recertify every two years.
The law carries a heavy penalty, as employers who violate the registration requirements will be fined up to $10,000 per employee.
If you have any questions about these or any other employment laws, please contact your regular Saul Ewing LLP labor and employment attorney.