Tag Archives: record retention procedures

Salary History Inquiry Bill Down But Far From Out

Contributed by Noah A. Frank, September 19, 2017

wage

On June 28, 2017, HB 2462, an amendment to the Illinois Equal Pay Act, passed both chambers of Illinois General Assembly. The bill would have made an employer’s inquiry into an applicants’ wage, benefits, and other compensation history an unlawful form of discrimination. Even worse for Illinois employers, the bill would allow for compensatory damages, special damages of up to $10,000, injunctive relief, and attorney fees through a private cause of action with a five (5) year statute of limitations.

On August 25, 2017, Governor Rauner vetoed the bill with a special message to the legislature that, while the gender wage gap must be eliminated, Illinois’ new law should be modeled after Massachusetts’s “best-in-the-country” law on the topic, and that he would support a bill that more closely resembled Massachusetts’ law.

The bill, which passed 91 to 24 in the House, and 35 to 18 in the Senate, could be reintroduced as new or amended legislation following the Governor’s statement, or the General Assembly could override the veto (71 votes are needed in the House, and 36 in the Senate, so this is possible) with the current language.

Why is this important?

With the Trump Administration, we have seen an increase in local regulation of labor and employment law. This means that employers located in multiple states, counties, and cities must carefully pay attention to the various laws impacting their workforces. Examples of this type of “piecemeal legislation” we have already seen in Illinois and across the country include local ordinances impacting minimum wage, paid sick leave, and other mandated leaves. Additionally, laws that go into effect in other jurisdictions may foreshadow changes at home as well (e.g., Illinois’s governor pointing towards Massachusetts’s exemplary statue).

Had it become law, this amendment would have effective required employers to keep applications and interview records (even for those they did not hire) for five years to comply with the statute of limitations for an unlawful wage inquiry (the Illinois Equal Pay Act already imposes a five year status of limitations for other discriminatory pay practices). By contrast, under Federal law, application records must be kept for only one year from the date of making the record or the personnel action involved (2 years for educational institutions and state and local governments).

What do you do now?

While the law has not gone into effect as of the date of this blog, it is likely that some form of the salary history amendment will ultimately become law in Illinois. Businesses should carefully review their job applications, interview questions, and related policies to avoid inquiries that may lead to challenges in the hiring process.

Additionally, record retention (and destruction!) policies should be reviewed for compliance with these and other statutes – as well as to ensure data integrity and security.

Finally, seek the advice of experienced employment counsel for best practices in light of national trends to remain proactive with an ounce of prevention

Arbitrary Disposal of Rejected Employment Applications vs. EEOC Regulations

Contributed by Steven Jados

On the final day of September, the EEOC filed a sex discrimination lawsuit against the Coca Cola Bottling Company of Mobile, Alabama. The EEOC frequently files lawsuits, but this lawsuit had an additional claim not often seen, which may be a wake-up call to many employers.

That claim was based on the bottling company’s alleged failure to preserve employment records—specifically, employment applications.

Federal regulations require the retention of employment applications “for a period of one year from the date of the making of the record or the personnel action involved, whichever occurs later.” For rejected applicants, the personnel action at issue is, of course, the rejection of the applicant.

Unless an employer is the rare company that makes decisions on applications the same day they are received, the EEOC’s retention requirements mandate that the employer keeps applications for one year—that is, one year from the date of rejection. If an employer fails to comply with this recordkeeping requirement, the EEOC can bring a lawsuit against the employer for an injunction to force the employer’s compliance.

What all of this means for employers, is that they must implement record retention procedures under which rejected applications are retained for a minimum of one year. Although it may seem obvious, step one of implementing such a procedure requires documenting the date when the decision to reject an application is made.

While some employers may brush off the record retention requirements as low-risk and overly technical, the reality is that if the EEOC investigates your company and finds recordkeeping violations, those violations may incite the EEOC to make more serious and widespread allegations of discrimination. These allegations will be more difficult to defend if the company has already destroyed relevant documents, such as employment applications. Bearing that in mind, employers should take this opportunity to review their record retention policies and procedures to ensure they comply with the EEOC’s regulations.