Quick Hits
- Beginning in January 2027, the IDOL will no longer allow employers to use “prefers not to identify” for reported employees’ race/ethnicity.
- The IDOL notes an academic study that suggests ways to examine EPRC filings and possibly take stronger action based on statistical differences.
- The IDOL has updated its process for handling overdue/unmade EPRC filings from three (3) steps to two (2) steps, meaning filers have less time to remedy filing issues and avoid penalties.
- The IDOL’s July 2026 notice makes it clear to filers that EPRC filing requirements are not tied to EEO-1 filing requirements, meaning that EPRC requirements will continue even if EEO-1 filings end.
The July email notes that, while there have been over 9,000 EPRC submissions to the IDOL since 2022, most employers interact with the EPRC process only every two years, and this notice helps ensure employers stay informed.
Significant Demographic Reporting Changes
The July email includes a discussion of the IDOL’s October 2025 addition of “Middle Eastern or North African” as a race/ethnicity reporting option for EPRC filers, implemented by modifying the CSV upload file used to provide EPRC data. While this race/ethnicity category has been added to both Illinois and California pay reporting, it has not been adopted by the U.S. Equal Employment Opportunity Commission (EEOC) for EEO-1 reporting.
In July 2026, the IDOL again updated the upload CSV file to remove the previously available race/ethnicity and sex option of “prefers not to identify.” Illinois employers could previously use this option to report employees who declined to provide their race/ethnicity and/or gender. Despite this mid-2026 change, the IDOL will still allow EPRC filers to continue to use the prior version of the CSV upload file containing the “prefers not to identify” field until January 2027, provided that they have previously downloaded the old version of the CSV upload file. Beginning in January 2027, the EPRC filing system will no longer accept any submissions containing “prefers not to identify.” The IDOL advises employers, through answers to frequently asked questions (FAQs), that they may upload an explanatory document providing additional information about employees that they wish to share.
For employees who decline to provide their race/ethnicity and/or gender, the IDOL advises that the employer may use employment records or observer identification to determine the missing self-identification (self-ID) information. The IDOL advises that records should be kept separately from an employee’s “basic personnel file or other records available to those responsible for personnel decisions.” In describing the self-ID process for EPRC reporting, the IDOL states that it follows the essence of federal guidance for self-ID, noting that employers should offer employees the opportunity to self-ID and provide a statement concerning the voluntary nature of this opportunity. The EPRC FAQs include a sample communication that can be shared with employees.
While still pending, the EEOC’s effort to end EEO-1 reporting could impact employers’ collections of race/ethnicity and gender data from all employees. If this happens, employers may need to consider a more narrowly focused collection of self-ID information for employees who will be reported in their EPRC filings.
Illinois Is Reviewing EPRC Data and Considering Next Steps, Including Self-Audit Tools
The IDOL partnered with the University of Illinois Urbana-Champaign Project for Middle Class Renewal to analyze the filed 2021–2023 EPRC data. This partnership included the production of a report (“UIUC Project Report”), which presented findings on pay disparities and recommended best practices for the IDOL and employers.
EPRC FAQ 30 provides more information on the UIUC Project, including access to the full report, which contains best-practice recommendations and voluntary HR-oriented practices published on pages 12–14. This report’s key findings include discussions of gender, racial, and ethnic pay gaps. In discussing the identified gender pay gaps, the report states that the analyzed EPRC pay data “reveals a consistent and measurable wage gap” between men and women working at “large private-sector firms” in Illinois. While the size of the pay gap varies with several factors, the report states that women in Illinois earn less on average than men “even when working in the same job categories for the same employers.” The analyses also revealed “larger and consistent wage gaps” between White workers and workers of color across large Illinois private-sector employers. More specifically, the report notes that “clear pay inequities remain” for Black and Hispanic workers in “lower-paid roles.”
The report recommends using a threshold-based flagging system to identify employers with unusually large wage gaps by comparing percentage differences relative to the dominant group, which is typically composed of whites and males.
The flagging system includes three (3) tiers: (1) informational for employers with average pay gaps of 5 percent to 15 percent; (2) moderate risk for employers with gaps exceeding 15 percent but below 25 percent, which would be recommended for further review; and (3) high risk for employers with wage gaps exceeding 25 percent, which would warrant immediate attention. As EPRC data collection improves, the report suggests that the system can be updated to include additional thresholds, such as the top 5 percent of employers with the widest gap within certain job classifications or geographic regions.
EPRC FAQ 30 advises employers on the report’s recommendations, which they can use to evaluate their company’s pay equity compliance. This FAQ states that the IDOL is considering different options for employer self-audit tools, which the IDOL hopes to make “available soon.”
Additional Administrative Updates
In addition to these major developments, the IDOL notified July email recipients of minor updates, including changes to the process for dealing with overdue or unmade EPRC filings. These changes reduce the process from three steps to two, giving filers less time to remedy filing issues and avoid penalties. The new process discusses penalties beginning with the first step, unlike the prior process.
The IDOL also made it clear that the EPRC requirement has been completely decoupled from the EEO-1 filing requirement, meaning that the EPRC requirement will continue if EEO-1 reporting ends.
The July email also notes improvements within the EPRC portal. This includes allowing users to obtain copies of certificates and providing an improved notice of the thirty-day deadline to make revisions to a rejected submission before the filing must be refiled, including a new filing fee. There was also a notice that a new EPRC reporting tool will be rolled out to users on January 1, 2027.
Key Takeaways
- Beginning no later than January 1, 2027, all employees, including those in EPRC reports, must have their gender and race/ethnicity established, even if they declined to provide self-ID information. For such employees, the IDOL directs employers to use employment records or observer identification to populate the missing self-ID information.
- The IDOL has reviewed the first three years of filed EPRC reports as part of the UIUC Project Report and is considering next steps. This report found specific evidence of pay gaps on the basis of both gender and race/ethnicity. The IDOL indicates that it is considering self-audit tools based on these findings and “hopes” to make them available soon. While the report’s threshold-based flagging system is not directly addressed by the IDOL in the July email or the EPRC FAQs, it provides a framework for the IDOL to easily evaluate employer submissions and consider them for additional follow-up.
- While it will be important to see if the IDOL takes concrete steps with respect to this threshold flagging system, employers who file EPRC reports may want to consider analyzing their data using the proposed system to see how their data performs as well as to determine explanations for identified differences.
- Employers may also want to consider more in-depth analyses, including a privileged pay audit in cases of large pay gaps shown by this process.
The July email shows that the IDOL continues to focus on changes to increase the validity of the filed EPRC data. It also suggests a shift from ensuring employers report as required to a deeper review of the filed data with an eye toward possible enforcement action. Employers may want to keep a careful eye on their EPRC reporting obligations moving forward.
Ogletree Deakins’ Chicago office, Government Contracting and Compliance Practice Group, Pay Equity Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments with respect to the Illinois EPRC application and review process and will provide updates on the firm’s Government Contracting and Compliance, Illinois, Pay Equity, and Workforce Analytics and Compliance blogs as additional information becomes available.
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