Changing the Way We Do Business: Wave of New Labor & Employment Laws Crashing Down Soon
By Jolianne S. Alexander
At the risk of being overly dramatic, I dare venture to say that there has never been a more exciting time to be a practicing labor and employment attorney. On both the state and federal levels, the coming months will bring a wave of new changes to the way both employee and employer attorneys do business. Those changes include: new legislation affecting the enforceability of confidentiality and arbitration clauses in employment contracts and settlement agreements; strict requirements for employers to provide annual sexual harassment training to their employees; and increased salary requirements to maintain the exempt status of employees. So as to best navigate these changes and to properly advise your clients, here is what you need to know:
Brand New Legislation
On August 9, 2019, the Illinois Legislature approved Senate Bill 75,1 which enacted the Illinois Workplace Transparency Act,2 the Illinois Sexual Harassment Victim Representation Act,3 and the Illinois Hotel and Casino Employee Safety Act.4
The Illinois Workplace Transparency Act
The purpose behind the Illinois Workplace Transparency Act, (“IWTA”), which goes into effect on January 1, 2020, is to ensure that employment contracts do not undermine the State’s interest in ensuring that all workplaces are free of unlawful discrimination and harassment.5 To carry out this purpose, the IWTA provides that no contract between an employer and employee can prohibit an employee from reporting any allegations of unlawful conduct to federal, state, or local officials.6 The Act further provides that a unilateral condition of employment which prevents an employee from making truthful statements about unlawful employment practices is against public policy.7 Notably, and most significantly for employers, the Act also generally prohibits unilateral conditions which require an employee to arbitrate a claim.8 In order to overcome this general prohibition, an employer who wishes to require employees to arbitrate their claims as a condition of their employment, must demonstrate actual, knowing, and bargained-for consideration from the employee and must further acknowledge an employee’s right to: (1) report good faith allegations to the government; (2) report criminal conduct to the government; (3) make truthful statements; and (4) request or receive confidential legal advice.9 An employer’s failure to establish these conditions renders the arbitration agreement unenforceable and against public policy.10
The IWTA also provides for a slew of requirements relating to the enforceability of confidentiality provisions within settlement and termination agreements between an employer and employee.11 The Act requires that for a confidentiality provision to be enforceable, it must be: (1) the documented preference of the employee and mutually beneficial to both parties; (2) the employer must notify the employee of the right to have an attorney review the agreement before execution; (3) there must be a valid and bargained-for exchange for the confidentiality; (4) the agreement does not waive claims concerning unlawful employment practices accruing after the date of execution; (5) the employee is given 21 days to consider the agreement; and (6) the employee is given 7 days to revoke the agreement.12 The failure to adhere to these requirements would render a confidentiality clause unenforceable and against public policy under the Act.13 Not only are these contracting requirements something that employer attorneys need to be mindful of when drafting employment-related agreements, but labor and employment attorneys on both sides need to be aware of the fact that the IWTA authorizes an employee to bring a civil action challenging a contract which violates the Act.14 In such a civil action, an employee is entitled to recover their attorneys’ fees if it is found that the contract violates the Act.15 Thus, caution should be exercised when drafting employment contracts, settlement agreements, and severance agreements to ensure compliance.
The Illinois Sexual Harassment Victim Representation Act
The Illinois Sexual Harassment Victim Representation Act, (“ISHVRA”), which goes into effect on January 1, 2020, was enacted to prohibit the dual representation by the same union representative of a union employee who has been the victim of sexual harassment and the alleged perpetrator.16 The Act requires unions to designate separate union representatives to represent the parties in any such grievance proceedings.17
The Illinois Hotel and Casino Employee Safety Act
The Illinois Hotel and Casino Employee Safety Act, (“HCESA”), which goes into effect on July 1, 2020, carves out very specific protections to hotel and casino employees. In addition to the slew of other labor and employment laws which apply to such employees, the HCESA further requires hotel and casino employers to equip their employees with a safety device to be able to summon for help if the employee reasonably believes that an ongoing crime, sexual harassment, sexual assault, or other emergency is occurring in the employee’s presence.18 The Act further requires these employers to develop, maintain, and comply with a written anti-sexual harassment policy to protect employees against sexual assault and sexual harassment by guests.19
Pursuant to statute, the policy shall include provisions which: (1) encourage an employee to immediately report to the employer any instance of sexual assault or sexual harassment by a guest; (2) describes the procedures to report a complaint; (3) instructs the complaining employee to cease work and leave the immediate area until security personnel or police arrive; (4) offers temporary work assignments to the complaining employee for the duration of the hotel guest’s stay; (5) provides the complaining employee with necessary paid time off to file a police report or testify in legal proceedings; (6) informs the complaining employee of their additional rights under the Illinois Human Rights Act and analogous federal law; and (7) informs the employee that they will not be retaliated against. 20 Notably, this policy must be provided to employees in both English and Spanish.21
Should an employer violate this Act, an employee is entitled to bring a civil action in circuit court, without having to first exhaust administrative remedies with any governmental agency, and recover all remedies available at law or in equity, including injunctive relief, reinstatement, and compensatory damages.22 In order to bring a claim under this Act, the employee is only required to notify their employer in writing of the alleged violation of the Act and allow the employer 15 calendar days to remedy the alleged violation.23 An employee who is successful on their claim is entitled to recover their reasonable attorneys’ fees and costs.24
Changes to the Illinois Human Rights Act
The 2019 legislative sessions have brought about numerous and ground-breaking changes to the Illinois Human Rights Act, (“IHRA”), 775 ILCS 5/1-101, et. seq. Effective January 1, 2020, the following changes will go into effect:
Section 1-103(Q) of the IHRA has been amended to include within the definition of “unlawful discrimination,” “actual or perceived discrimination;”25
Section 1-103 has been amended to define and clarify the meaning of “arrest record” as used in Section 2-103 of the Act. “Arrest Records” are defined to include an arrest not leading to conviction, a juvenile record, or a criminal history record ordered expunged, sealed, or impounded;26
Section 2-101(E)’s definition of “sexual harassment” has been broadened to expand actionable working environments to physical locations beyond where the employee is assigned to perform his/her duties;27
Article 2 of the IHRA has been broadened to make “harassment” based on any protected category unlawful.28 Notably, the Act’s prohibition on “harassment” mirrors the “sexual harassment” language of Section 2-102(D), which has previously been construed by the Illinois Supreme Court as providing for strict liability for managerial instances of sexual harassment.29 Whether or not strict liability will be the gold standard in other instances of harassment remains to be seen;
Section 2-102(A) has been amended to protect non-employees from unlawful discrimination, which includes contractors and consultants;30
Section 2-102(D) has been amended to protect non-employees from unlawful sexual harassment;31
Section 2-108 has been added to the IHRA. This section requires employers with adverse judgments against them to disclose to the Illinois Department of Human Rights, (“IDHR”), every July 1, the total number of adverse judgments against them from the previous year; whether equitable relief was ordered; and the applicable protected category relating to the adverse judgment.32 The Section also authorizes the IDHR to request an employer to submit the total number of settlements entered into for the past five years relating to unlawful discrimination or sexual harassment.33 Notably, an employer’s failure to report may subject it to civil penalties under newly enacted Section 8-109.1.34 This section will remain in effect until January 1, 2030;35
Section 2-109 has been added to the IHRA. This section requires employers with any number of employees to utilize the IDHR’s model sexual harassment training program or to establish its own sexual harassment training program on a yearly basis.36 Failure to provide training after receiving notice from the IDHR to show good cause, shall subject an employer to civil penalties, as authorized by Section 8-109.1;37
Section 2-110 has been added to the IHRA. This section requires restaurants and bars to have in place a written sexual harassment policy, which is provided to all employees within the first calendar week of their employment.38 The policy must be made available in both English and Spanish.39 Restaurants and bars are also required to provide sexual harassment training to their employees on an annual basis.40 Failure to comply, after receiving notice from the IDHR to show good cause, shall subject the employer to civil penalties as authorized by Section 8-109.1;41
Section 7-109.1 has been added to the IHRA. This section provides that if the employee has initiated litigation in federal or state court for the purpose of seeking final relief on some or all of the issues that form a basis of a charge filed under Section 7A of the IHRA, either party may request the IDHR to administratively dismiss the charge;42
Section 7A-102(B) has been amended to allow the IDHR to issue its notice to commence civil action by electronic mail;43
Effective July 1, 2020, section 2-101(B)’s definition of “employer” will change from any person employing 15 or more employees to any person employing one or more employees, regardless of the protected category.44
Changes to the Illinois Equal Pay Act
Now in effect as of September 29, 2019, the Illinois Equal Pay Act, (“IEPA”), 820 ILCS 112/1, et. seq., was amended to prohibit employers from requesting job applicants to disclose their salary history as a condition of being considered for an offer of employment.45 A violation of this section would subject an employer to special damages not to exceed $10,000, as well as injunctive relief and reasonable attorneys’ fees and costs.46 The Act was further amended to broaden the types of recovery for claims under the Act, to include compensatory and punitive damages, as well as injunctive relief, in addition to other penalties, where appropriate.47
Changes to the Fair Labor Standards Act’s Code of Federal Regulations
On September 27, 2019, the U.S. Department of Labor issued a Final Rule amending the Section 541 series of the Code of Federal Regulations.48 Effective January 1, 2020, the Final Rule provides that salary requirements for exempt executive, administrative, and professional employees under Section 13(a)(1) of the Fair Labor Standards Act, (“FLSA”), will generally increase from $455.00 per week to $684.00 per week, or $35,568.00 per year.49 The Rule further provides that up to ten percent of an exempt employee’s non-discretionary bonuses or incentive payments, ($68 per week), may be used to satisfy the new salary threshold. For a more detailed guide, the Department of Labor provides a Small Business Compliance Guide50 outlining the new salary thresholds for various types of exempt categories, which are as follows on the following page.
Due to the extensive overhauls of numerous labor and employment-related laws, both employee and employer attorneys will need to be diligent in maintaining compliance in the changing landscape. Such diligence will likely include revising employment contracts and employee handbooks, increasing salaries or changing job duties, eliminating or revising formerly standard confidentiality clauses in settlement and termination agreements, planning and administering sexual harassment training programs, and generally, changing the way we do business.
1. Pub. Act 101-221, 2019 Ill. Legis. Serv. (West).
2. Illinois Workplace Transparency Act, Pub. Act. 101-221, 2019 Ill. Legis. Serv. (West), citing 820 ILCS 96/1-1, et. seq.
3. Illinois Sexual Harassment Victim Representation Act, Pub. Act. 101-221, 2019 Ill. Legis. Serv. (West), citing 820 ILCS 61/3-1, et. seq.
4. Illinois Hotel and Casino Employee Safety Act, Pub. Act. 101-221, 2019 Ill. Legis. Serv. (West), citing 820 ILCS 325/5-1, et. seq.
5. See supra note 2, citing 820 ILCS 61/1-5.
6. See supra note 2, citing 820 ILCS 96/1-20.
7. See supra note 2, citing 820 ILCS 96/1-25(a).
8. See supra note 2, citing 820 ILCS 96/1-25(b).
9. See supra note 2, citing 820 ILCS 96/1-25(c). See also, Illinois Uniform Arbitration Act, Pub. Act. 101-221, 2019 Ill. Legis. Serv. (West), citing 710 ILCS 5/1 (providing that a written agreement to arbitrate is not enforceable unless it complies with the Workplace Transparency Act).
11. See supra note 2, citing 820 ILCS 96/1-30(a).
13. See supra note 2, citing 820 ILCS 96/1-30(c).
14. See supra note 2, citing 820 ILCS 96/1-35.
16. See supra note 3, citing 820 ILCS 61/3-10.
18. See supra note 4, citing 820 ILCS 325/5-10(a).
19. See supra note 4, citing 820 ILCS 325/5-10(b).
22. See supra note 4, citing 820 ILCS 325/5-20.
25. Illinois Human Rights Act, Pub. Act. 101-221, 2019 Ill. Legis. Serv. (West), citing 775 ILCS 5/1-103(Q).
26. Illinois Human Rights Act, Pub. Act. 101-565, 2019 Ill. Legis. Serv. (West), citing 775 ILCS 5/1-103(B-5), 775 ILCS 5/2-103.
27. See supra note 25, citing 775 ILCS 5/2-101(E).
28. See supra note 25, citing 775 ILCS 5/2-101(E-1); 775 ILCS 5/2-102(A).
29. Sangamon Cty Sheriff’s Dep’t v. Ill. Human Rights Com’n, 233 Ill.2d 125 (2009).
30. See supra note 25, citing 775 ILCS 5/2-102(A-10).
31. See supra note 25, citing 775 ILCS 5/2-102(D-5).
32. See supra note 25, citing 775 ILCS 5/2-108(B).
33. See supra note 25, citing 775 ILCS 5/2-108(C).
34. See supra note 25, citing 775 ILCS 5/2-108(F), 775 ILCS 5/8-109.1.
35. See supra note 25, citing 775 ILCS 5/2-108(H).
36. See supra note 25, citing 775 ILCS 5/2-109.
37. See supra note 25, citing 775 ILCS 5/2-109(D).
38. See supra note 25, citing 775 ILCS 5/2-110(B).
40. See supra note 25, citing 775 ILCS 5/2-110(C).
41. See supra note 25, citing 775 ILCS 5/2-110(E).
42. See supra note 25, citing 775 ILCS 5/7-109.1(1).
43. See supra note 25, citing 775 ILCS 5/7A-102(B).
44. Illinois Human Rights Act, Pub. Act. 101-430, 2019 Ill. Legis. Serv. (West), citing 775 ILCS 5/2-101(B).
45. Illinois Equal Pay Act, Pub. Act. 101-177, 2019 Ill. Legis. Serv. (West), citing 820 ILCS 112/10(b-5), eff. Sep. 29, 2019.
46. 820 ILCS 112/30(a-5).
47. 820 ILCS 112/30(a).
48. Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, 84 Fed. Reg. 51,230 (Sept. 27, 2019) (to be codified at 29 C.F.R. pt. 541).
49. 29 U.S.C. § 213(a)(1); 29 C.F.R. pt. 541.
50. Dep’t of Labor, Small Entity Compliance Guide to the Fair Labor Standards Act’s Exemptions, https://www.dol.gov/whd/overtime2019/overtime_complianceguide.pdf .