Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—Illinois is taking a closer look at employer pay data: 5 steps to prepare for 2027, (Sep 28, 2026)

By Jessica D. Causgrove and Sarah T. Oberg Ramirez of Fisher Phillips, LLC

The agency added “Middle Eastern or North African” (MENA) as a race category for EPRC reporting.

Illinois employers covered by pay data reporting requirements should prepare for additional scrutiny and targeted audits. Notably, the state labor department is also making an important reporting change that takes effect January 1, 2027, and will reject Equal Pay Registration Certificate (EPRC) submissions that identify an employee’s race or sex as “prefers not to identify.” The change is part of a broader effort to improve the quality of the demographic and compensation data that’s collected from Illinois employers and analyzed for potential pay disparities. Covered employers should take steps now to review their data and prepare for the next EPRC submission. Here’s what you need to know and the five steps you should consider taking now to prepare.

Quick Refresher: What Is the EPRC?

• The Illinois Equal Pay Act requires private employers with 100 or more employees in Illinois to obtain an EPRC and recertify every two years.

• As part of the application process, covered employers must submit employee-level demographic and compensation information to the Illinois Department of Labor (IDOL), along with an Equal Pay Compliance Statement.

• Through the statement, employers certify their compliance with applicable equal pay laws and that average compensation for female and minority employees is not consistently below average compensation for male and non-minority employees within specified job categories.

• The data submission includes a list of all employees during the 12-month calendar year preceding the employer’s filing deadline, separated by gender, race, and ethnicity, as well as hours worked.

• Employers must also report whether each employee was paid hourly or on a salary basis, the hourly rate for hourly employees, and whether the employee was covered by a collective bargaining agreement.

“Prefers Not to Identify” Is Going Away

Previous versions of IDOL’s EPRC reporting template allowed employers to report an employee’s race or sex as “prefers not to identify.” According to IDOL, however, an increasing number of employers began using that designation for significant portions of their workforces, impeding the agency’s ability to meaningfully enforce the Equal Pay Act. IDOL has already begun rejecting submissions where a significant percentage of employees are identified this way and requiring employers to provide the missing information.

Beginning January 1, 2027, the option will disappear altogether. Employers will be required to use IDOL’s revised reporting template, and the agency’s system will reject any submission identifying an employee’s race or sex as “prefers not to identify.”

Importantly, this does not mean employers should require employees to self-identify. IDOL continues to recognize voluntary self-identification as the preferred method for collecting demographic information. If an employee declines to self-identify their race, ethnicity, or gender, however, IDOL advises that employers may use existing employment records or observer identification for EPRC reporting purposes. IDOL has also advised that an employer wishing to address a particular employee’s circumstances may upload an explanatory document with its EPRC submission.

IDOL has made another notable change to its demographic categories: effective October 2025, the agency added “Middle Eastern or North African” (MENA) as a race category for EPRC reporting.

IDOL Is Taking a Closer Look at Employer Pay Data

IDOL has explained that its demographic reporting changes are intended to improve the accuracy and quality of employer pay data for its reporting and analysis purposes. Although individual employers’ wage data generally remains confidential, the Equal Pay Act permits IDOL to compile aggregate reports and, in certain circumstances, share identifiable information with the Illinois Department of Human Rights or Illinois Attorney General.

In 2025, IDOL partnered with the University of Illinois Urbana-Champaign to analyze aggregate data collected through the EPRC program. The resulting December 2025 report analyzed pay disparities in Illinois and offered recommendations for IDOL and employers.

Employers should understand that receiving an EPRC does not necessarily mean IDOL has substantively approved the employer’s compensation practices. IDOL states that, due to the volume of EPRC submissions and limited staff resources, it may initially approve an application based on technical compliance and analyze the employer’s compensation data later. If that subsequent review reveals apparent race- or sex-based pay disparities, IDOL may request additional information, seek to suspend or revoke the employer’s EPRC, or initiate its own Equal Pay Act investigation.

Noncompliance can carry significant consequences. IDOL may reject an application, suspend or revoke an existing EPRC, or impose civil penalties of up to $10,000 for violations of the EPRC requirements.

5 Steps Illinois Employers Should Take Now

With the January 1, 2027, reporting change approaching, covered Illinois employers should consider taking the following steps:

1. Identify your next deadline. EPRC certification is not an annual process. Employers generally must recertify every two years from the date their last certificate was issued, and IDOL sends notices approximately 180 days before the recertification deadline. Employers should confirm their next filing date and make sure the appropriate staff have access to the portal.

2. Review your demographic data now. Identify employees currently coded as “prefers not to identify” and any employees with missing race, ethnicity, or gender information. Employers that wait until their next EPRC deadline to address gaps may find themselves scrambling to collect information required for a successful submission.

3. Update your demographic data collection practices. Confirm that HR and payroll systems reflect IDOL’s current reporting categories, including the new MENA race category, and consider giving employees an opportunity to voluntarily self-identify or update their demographic information. Employers should also develop a process consistent with IDOL guidance for situations where employees decline to self-identify.

4. Carefully review your data before filing. EPRC reporting should not be treated as a purely administrative exercise. Employers should verify the accuracy of employee classifications, demographic information, hours, and compensation data before submitting it to IDOL.

5. Consider a privileged pay equity review. Given IDOL’s increasing use and analysis of EPRC data, employers should consider working with counsel to evaluate what their compensation data may show before submitting it to the state. A proactive review can help employers identify potential disparities, evaluate legitimate explanations for compensation differences, and determine whether corrective measures may be appropriate.

Conclusion

Make sure you are subscribed to Fisher Phillips’ Insight System to get the most up-to-date information on Illinois pay equity developments. For assistance with EPRC compliance or evaluating your organization’s pay practices, contact your Fisher Phillips attorney, the authors of this Insight, or any attorney in our Chicago office.

Jessica D. Causgrove and Sarah T. Oberg Ramirez

Fisher Phillips, LLC

URL: https://www.fisherphillips.com/

Attorneys: (Fisher Phillips).

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