In an effort to close the wage gap, on April 24, 2018, Governor Phil Murphy signed into law an equal pay amendment to the New Jersey Law Against Discrimination (NJLAD) to provide greater clarity and rights for employees regarding equal pay for equal work. Some commentators have opined that this new law is the most progressive equal pay legislation in the country. Despite the support for it among legislators, similar legislation had been vetoed several times by former Governor Chris Christie.
New Jersey’s Equal Pay Act will provide more protections for employees than its federal counterpart, the federal Lily Ledbetter Equal Pay Act. It not only will provide for gender equality with regard to wages, but also will prohibit wage discrimination on the basis of any of the enumerated protected classes under the NJLAD in terms of “substantially similar work when viewed as a composite of skill, effort and responsibilities.” Under the new law, employers will also have to show that any pay differences are due to a legitimate non-discriminatory reason, such as seniority or merit pay, and not because of one’s protected class.
Employers must also examine any differences on a company-wide basis—a major departure from its federal counterpart. The law itself does not clarify whether large corporations with locations nationwide must include facilities outside of New Jersey; so, it would be wise for New Jersey-based companies with out-of-state facilities to take a conservative approach.
In the event of a violation, employees may seek back pay for up to six years and each paycheck resets the time that an employee may bring a wage discrimination lawsuit. Employers also cannot shorten the time within which a suit may be brought, either through an arbitration agreement or a waiver in a job application. The most significant part of the law provides that in successful cases for unlawful wage discrimination, treble damages are mandatory.
New Jersey’s Equal Pay Act will also amend the NJLAD with regard to retaliation. Specifically, the new law prohibits an employer from taking any adverse action against an employee if the employee shares information relevant to a wage discrimination claim with a lawyer or government agency. Additionally, like the National Labor Relations Act, this new law will protect employees from retaliation if they share and/or talk about their wages with co-workers.
Finally, companies doing business with the State will have to provide wage information about their employees including information on gender, race, and ethnicity.
The Equal Pay Act will take effect July 1, 2018, and a copy of the law can be found here.
The Bottom Line
It would be wise for employers in New Jersey to fully understand the additional protections being provided to workers under the legislation and conduct a compensation audit of current employees with known demographic information to ensure compliance with this new law in order to reduce the risk of costly penalties.