The WRA makes Illinois the first state to reinforce collective bargaining rights through a constitutional amendment.
As 2022 draws to a close, Illinois and Chicago employers face new labor and employment obligations heading into the new year.
Illinois Voted Yes to Workers’ Rights Amendment – But Litigation Is Expected in 2023
On November 8, 2022, Illinois voters approved the Workers’ Rights Amendment (WRA) to the Illinois Constitution that guarantees workers a fundamental right to organize and bargain collectively over wages, hours and other terms and conditions of employment, and permits compulsory membership in unions as a condition of employment. In doing so, Illinois voters formally rejected so-called right-to-work laws or constitutional amendments, which 28 states have adopted and that currently prohibit any employee from being forced to join a union or pay union dues as a condition of employment.
The WRA makes Illinois the first state to reinforce collective bargaining rights through a constitutional amendment. The WRA prohibits laws that interfere with private sector employees’ right to bargain collectively “through representatives of their own choosing,” bars laws that prohibit compulsory union membership and materially expands the collective bargaining topics to include employees’ “economic welfare” and workplace safety.
Despite its history making in Illinois, the WRA faces a legal battle based on arguments that it is preempted by the National Labor Relations Act’s (NLRA) existing regulation of collective bargaining rights in private sector employment. The NLRA and Illinois public sector labor laws already protect employees’ rights to organize and collectively bargain and limit negotiation power to certified unions. Illinois courts rejected this argument earlier in 2022, but did so because at that time there was no basis to deny Illinois voters the opportunity to cast their ballots regarding the WRA.
While litigation over the WRA’s expansion of unions’ rights will likely proceed in 2023, employers should remain alert for union organizing efforts in the wake of the pro-labor WRA and stay tuned for updates on other labor developments.
Additional New Requirements Under Illinois Leave, Rest and Anti-Discrimination Laws Take Effect January 1, 2023
Family Bereavement Leave Act
The former Child Bereavement Leave Act has been renamed and expanded into the Family Bereavement Leave Act (FBLA) effective January 1, 2023. Under the FBLA, employers with 50 or more employees within 75 miles of an employee’s worksite must provide employees up to two weeks (10 work days) of unpaid bereavement leave under an expanded list of circumstances and covered family members. In addition to traditional bereavement leave for reasons related to mourning the death of a family member, the FBLA adds new reasons for protected leave, including losses related to an employee’s miscarriage, unsuccessful fertility treatment, diagnosis with negative impact on pregnancy or fertility, or failed or non-finalized adoption or surrogacy agreement. While employers may request both advance notice and reasonable documentation supporting a FBLA leave request, employees need not identify the specific reason for their leave if it is tied to the newly added circumstances related to pregnancy, adoption, surrogacy or fertility treatment.
One Day Rest In Seven Act
Illinois employers also must comply with expanded obligations for employee meal breaks and rest periods under the long-standing One Day Rest In Seven Act (ODRISA). Under ODRISA, employers must provide a minimum rest period of 24 hours during each work week. Effective January 1, 2023, the rest day requirement must be calculated based on each consecutive seven-day period, rather than the pre-amendment use of “calendar week.” ODRISA also has long required employers to provide employees with an initial 20-minute meal break scheduled no later than five hours after the employee begins work for shifts of 7.5 continuous hours or longer. Beginning January 1, 2023, ODRISA now requires employers to provide an additional 20-minute meal break for each 4.5 hours worked beyond each continuous 7.5-hour shift. The amendment also now specifies that employee meal breaks must exclude reasonable time to use the restroom. Further, employers face increased penalties for ODRISA violations, which are now considered civil offenses and carry a series of escalating monetary fines payable to the Illinois Department of Labor and as damages to affected employees.
CROWN Act
Effective January 1, 2023, Illinois joins the rapidly increasing number of states and municipalities that prohibit discrimination against employees on the basis of hairstyles or other traits historically associated with specific racial groups. The CROWN Act amends the Illinois Human Rights Act (IHRA) by expanding the definition of “race” to include “traits associated with race, including, but not limited to hair texture and protective hair styles such as braids, locks, and twists.” While employers may still enact dress code and grooming policies for non-discriminatory business reasons, employers should review their grooming policies and any restrictions on haircuts or styles to ensure compliance with the new law.
Chicago Employers: Sexual Harassment Prevention Policy Updates, Plus Additional Training to Be Completed by June 30, 2023
Amendments to the Chicago Human Rights Ordinance, effective July 1, 2022, require Chicago employers to update their sexual harassment prevention policy and post a sexual harassment in the workplace prevention poster. Employers also must provide annual sexual harassment prevention training that is in addition to the annual training requirements for Illinois employers under the IHRA.
By June 30, 2023, Chicago employers must complete their first round of mandatory, annual sexual harassment prevention training, which includes:
(1) One hour of sexual harassment prevention training for all Chicago employees;
(2) One additional hour of bystander training for all Chicago employees; and
(3) One additional hour of sexual harassment prevention training for Chicago supervisors and managers.
The city ordinance’s broad definition of employer includes all individuals or entities who employ one or more employees working in Chicago, or who are subject to a City of Chicago license requirement. The one-hour, company-wide sexual harassment prevention training can be satisfied by the same one-hour training program required for all Illinois employers under the IHRA since 2020. However, all Chicago employees and supervisors or managers now require additional training.
Additional details on these expanded obligations under existing laws are available in our prior Alert.
Department of Labor Continues Distribution of Equal Pay Act Registration Certificate Application Notices
As detailed in our two prior Alerts from February 3 and June 28, private businesses with more than 100 employees must obtain their first biennial Equal Pay Registration Certificate (EPRC) by March 23, 2024, and plan for recertification every two years thereafter. The Illinois Department of Labor began distribution of its EPRC notices via email to each covered employer’s representative on file in January 2022, and will continue doing so through the end of the initial compliance period in March 2024.
Along with a $150 application fee, each employer’s EPRC application must be submitted via the Department’s EPRC online portal and must include the company’s EEO-1 report, employee-specific composition data (including race, gender and ethnicity data, job classification and title, location by county, start/termination date and total wages) in a format dictated by the Department, and the company’s certified statement of its compensation and benefit-setting practices and compliance with state and federal antidiscrimination laws.
Employers who are still waiting for the Department’s initial communication can ensure that they have registered an appropriate person’s email address as a designated recipient with the Department. In the meantime, the Department has provided materials on its website to facilitate timely and accurate compliance, including the template compliance statement and employee composition data report, training slides, templates of the EPRC portal entry screens, an enrollment process flow chart and FAQs.
Businesses that fail to obtain their EPRC biennially could face civil penalties of up to $10,000 per violation and fines of $2,500 to $10,000 per affected employee. Given the significant penalties associated with non-compliance, businesses are highly encouraged to begin compiling the necessary information in advance of receiving the Department’s EPRC application deadline notice.
Corporations Must File EEO-1 Employee Composition Data with Annual Corporate Filings
Beginning with annual corporate reports required to be filed on and after January 1, 2023, any Illinois corporation that is required to file a federal EEO-1 report (generally employers with at least 100 employees and certain federal contractors with at least 50 employees) will be required to include employee composition data in their annual benefit reports filed with the Illinois Secretary of State. The required report will include employee composition data substantially similar to that included in the EEO-1 report, including employee gender and race/ethnicity by job categories. However, unlike EEO-1 reports, which are not made public, the Illinois employee composition data reports filed by corporations will be published online with other corporate reports by the Secretary of State.
Expansion of Auto-Enrollment Requirements Under the Secure Choice Retirement Savings Program
The registration requirements for Illinois employers under the Secure Choice Retirement Savings Program (SCRSP) continue for small employers into 2023. Illinois requires all employers with five or more employees that do not provide employees with a 401(k), 403(b) or other covered retirement benefit plan to automatically enroll employees in the SCRSP and make required deductions on their behalf unless employees opt out.
Companies were required to register with the SCRSP beginning with employers with 25 or more employees by November 1, 2021, followed by employers with 16-24 employees by November 1, 2022. Employers with 5-15 employees have until November 1, 2023, to register as required. Penalties for failure to register with the SCRSP include fines of $250 to $500 per employee.
What This Means for Employers
Given all the new requirements for employers in 2023 and beyond, Illinois and Chicago employers are encouraged to consult with counsel to address updated requirements for bereavement leave and anti-discrimination policies, meal break and rest day requirements and sexual harassment prevention training. Employers also should prepare for employee composition data reporting obligations in consultation with counsel and be on the lookout for their EPRC application notice in an email from the Illinois Department of Labor.
For More Information
If you have any questions about this Alert or have specific questions and concerns related to your operations, please contact Daniel O. Canales, Jennifer Long, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.