New Jersey Equal Pay Act
New Jersey recently passed legislation substantially expanding pay equity protections for New Jersey employees. The law becomes effective on July 1, 2018, and MEA is here to help its members comply with the new requirements by that date. Specifically, as part of membership:
- This alert summarizes the key components of the new law; and this topic was covered during our Trending Topic Webinar, “New Jersey Sick Leave and Equal Pay Measures – What NJ Employers Should Be Doing,” now available to MEA Members in Member Tools.
- Human Resources professionals and a Member Legal Services attorney are available to review your existing policies and practices for compliance and recommended revisions. This is part of membership and does not result in an additional fee. Contact hotline to arrange for your compliance review as soon as possible to ensure compliance before the law goes into effect on July 1, 2018.
Here is the information you need to know about the new law:
Protections Extend Beyond Gender
The Diane B. Allen Equal Pay Act (the “Act”) amends the New Jersey Law Against Discrimination (“NJLAD”) to provide comprehensive equal pay protections for employees in New Jersey. The Act, which becomes effective on July 1, 2018, prohibits pay disparities not only on the basis of gender, but upon all characteristics protected by the NJLAD, including race, national origin, nationality, ancestry, age, marital status, affectional or sexual orientation, pregnancy, sex, gender identity or gender expression and disability. Specifically, the Act makes it an unlawful employment practice “[f]or an employer to pay any of its employees who is a member of a protected class at a rate of compensation, including benefits, which is less than the rate paid by the employer to employees who are not members of the protected class for substantially similar work, when viewed as a composite of skill, effort and responsibility.” An employer who is paying a rate of compensation in violation of the law cannot reduce the rate of compensation of any employee in an effort to comply.
Employer’s Burden to Justify Pay Differentials
The Act further provides that an employer may pay a different rate of compensation only if the employer demonstrates that the differential is made pursuant to a seniority system, a merit system, or if the employer can show that:
- The differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class, such as training, education or experience, or the quantity or quality of production;
- The factor or factors are not based on, and do not perpetuate, a differential in compensation based on any characteristic of members of a protected class;
- Each of the factors is applied reasonably;
- One or more of the factors account for the entire wage differential; and
- The factors are job-related with respect to the position in question and based on a legitimate business necessity. A factor based on business necessity shall not apply if it is demonstrated that there are alternative business practices that would serve the same business purpose without producing the wage differential.
Longer Statute of Limitations and Enhanced Remedies
As with the federal Lily Ledbetter Fair Pay Act, New Jersey’s law provides that a violation of the law takes place every time an employee is affected by discrimination in compensation. A new claim therefore may arise every time wages, benefits or other compensation is paid – in other words, with each new paycheck. Moreover, an employee can recover back pay going back for a period of 6 years.
When a violation of the Act is proven, a court or the New Jersey Division of Civil Rights must award treble damages, which is three times the amount of the pay differential. As with other claims under NJLAD, a successful plaintiff also may recover attorney’s fees, costs and punitive damages if the violation of the law is found to be willful.
The Act also prohibits employers from retaliating against employees for discussing or disclosing to others – including co-workers, former employees, a lawyer from whom an employee seeks legal advice, or any government agency – information regarding compensation and benefits. The employer further cannot require an employee or prospective employee to sign a waiver not to discuss or disclose this information.
How to Prepare
Employers should start preparing now for the Act, as it goes into effect on July 1, 2018. Employers should examine their existing pay practices and policies to ensure that employees are being paid equally for substantially similar work.
Of course, we will continue to keep our Members posted on any further developments.
Amy McAndrew, Esquire
Director of Member Legal Services
MidAtlantic Employers’ Association
*This Alert is provided for general informational purposes only and does not constitute legal advice.