Equal Pay Act
Governor Murphy signed New Jersey’s Equal Pay Act into law in 2018. The NJEPA takes a necessary step in making pay discrepancies in the workplace more transparent with the hopes that this will address the pay differential between white men minorities, and women. Essentially, it bars any penalty to any employee for requesting or disclosing information regarding any employee’s job title, rate of compensation, benefits, race, gender, ethnicity, or other protected characteristic when the purpose of the inquiry or disclosure to investigate the possibility of discriminatory treatment. (While the NJEPA was originally intended to address inequitable pay for women, it was expanded to cover all protected classes of people.)
This allows for employees to obtain information which previously (and even now) is largely safeguarded by employers as “private” in order to determine whether they are being discriminated against based upon a protected classification. Any employer “policy” which forbids discussing compensation in the workplace could be considered void by the law.
The NJEPA amended New Jersey’s Laws Against Discrimination to enable the use of the protections of that statute. The NJEPA also specifically makes it unlawful to pay employees in protected classes a different rate of compensation when performing substantially similar work considering skill, effort, and responsibilities. Differentials may still exist when based on seniority, merit, education, productivity, experience, and other legitimate business reasons. The Act also allows expands upon the LAD’s typical 2-year statute of limitations by setting forth that limitation period restarts each time the employee receives unequal compensation resulting from a discriminatory decision or practice. The employee may also recover up to 6 years of back pay as a result of a violation by the employer. Additionally, the employee may receive treble damages – meaning that they may recover three times the monetary damages awarded as a result of the pay discrepancy.
The full title of the Act is the Diane B. Allen Equal Pay Act. Ms. Allen was a New Jersey State Republican Party Senator from 1998 to 2018. She is currently the Chair of the National Foundation for Women Legislators – an organization focused on providing resources to elected women for leadership development and providing assistance to women in government or who wish to be in government leadership positions.
One concern with the law is that it may be difficult to define what “substantially similar work” is, and to what extent any difference in any given job might legally permit a difference in pay. Another concern is that the NJEPA does not appear to require “intent” to discriminate in order to constitute a violation. That could be both good and bad because it is almost impossible for an employee to provide intent in these types of situations; however, particularly in large companies, the pay discrepancy could have nothing to do with the protected classification. Does this law thus encourage employers to require employees to submit demographic information (including sensitive information such as sexual orientation) in order to evaluate whether there is any pay discrepancy?
Since this law is still relatively new, only a few courts have published any decisions even referring to it. One federal case found that the NJEPA should not be applied retroactively. However, since that was a federal case, it is not binding upon how New Jersey’s State Courts may decide on the law. Therefore, there are many questions left to be resolved as cases begin reaching the courts for decisions.
The employment attorneys at McLaughlin & Nardi, LLC are experienced with New Jersey employment laws, particularly concerning discriminatory treatment by employers, and can advise both employers and employees about their rights and responsibilities under New Jersey employment law requirements. To learn more about what we may be able to do to help, please visit our website, or contact one of our New Jersey lawyers by e-mail or telephone at (973) 890-0004.