NJ Lawmakers Pass Equal Pay Act: What It Means For Your Business
New Jersey lawmakers have overwhelmingly passed the Diane B. Allen Equal Pay Act, a comprehensive pay equity law that significantly strengthens employer requirements to provide equal pay for similar employment without regard to gender or other protected characteristics. Governor Phil Murphy, a strong proponent of equal pay, has stated he will sign the legislation, which would take effect on July 1, 2018. Once signed, New Jersey would have one of the broadest equal pay laws in the country.
The law prohibits employers from paying employees in a protected class at a lower rate of pay, including benefits, than other employees for substantially similar work.
Unlike federal law and other state laws, the New Jersey law would include protections for any employee who has a protected characteristic under the New Jersey Law Against Discrimination (LAD). Whereas many pay equity laws address gender pay disparity, this law would include protected characteristics such as race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, sexual orientation, genetic information, pregnancy or breastfeeding, sex, gender identity and disability.
A differential in rate of pay will be allowed if an employer can demonstrate distinguishing factors such as seniority system, merit system or bona fide legitimate job-related factors such as training, education or experience.
The new law would expand the statute of limitations on pay equity violations to six years. Additionally, the amendment states that a violation of the law will have occurred each time an employee is affected by a discriminatory pay practice, such as when payment of wages, benefits or other compensation is made. When violations are proven, treble damages will be awarded, thus significantly increasing damages.
Employers would be prohibited from retaliating against an employee for requesting, disclosing or discussing information about job titles, occupational categories and compensation with any current or former employee, legal counsel or government official.
This new legislation is likely to cause a major compliance headache for New Jersey employers who will need to examine the fairness of their pay systems not only for women, but other protected groups as outlined in the examples above.
New Jersey employers should evaluate their pay practices to ensure that any compensation differentials are based on legitimate, non-discriminatory reasons. Such evaluations should continue to be performed each time that bonuses, increases and other benefits are modified. To ensure compliance with all state and federal laws, a dedicated HR professional at Wiss can take the time to learn about your company’s unique needs to review your practices and procedures.