Guidelines Published to Clarify New Jersey Equal Pay Act Requirements

The New Jersey Division of Civil Rights recently published a guide sheet for employers and employees providing clarity on the protections of the Diane B. Allen Equal Pay Act, which went into effect July 2018. The Equal Pay Act prohibits an employer from paying an employee who is a member of a protected class less than what it pays an employee who is not a member of that protected class for substantially similar work.

The law, enacted by Gov. Phil Murphy, made New Jersey’s state protections against gender-based pay discrimination stronger than federal law, and the strongest protections in the United States. It strengthened the equal pay protections of the New Jersey Law Against Discrimination (NJLAD). The Act also amended the NJLAD to impose substantial penalties against employers who violate the law.

Equal Pay Act Guidance

The guide sheet summarizes the changes that the Act made the NJLAD. The guidelines are divided into two sections. The first section provides an overview of the Equal Pay Act, while the second section contains frequently asked questions about the act. The guidance explains the Act in clear, understandable terms for employers and employees. It also provides information as to how the Division of Civil Rights interprets the Act. This has been a source of issue in the past, as the Division has received several complaints under the Equal Pay Act to date.

The guidance condenses the changes that the Act made to the NJLAD and how the changes affect employers and employees. In addition to answering frequently asked questions, its intention is to apprise employers of their obligations and employees of the rights afforded to them under the law.

The Act covers virtually all employers in New Jersey. This includes employers that are not physically “located” in New Jersey. The guidance makes clear that the employer need only have employees with a primary place of work in New Jersey for the Act to apply. Additionally, the employer need not have a minimum amount of employees for the Act to apply. Nearly all employees are covered by the Act. This includes full-time, part-time, seasonal, per-diem, and temporary employees. It does not, however, apply to federal employees or domestic employees.

Additions to the Act

Moreover, the guide sheet explains further that the Equal Pay Act added a new sub-section to the NJLAD, N.J.S.A. §10:5-12(t). Subsection (t) prohibits an employer from paying any employee “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.” The guidelines also provide that the employer is liable under the Act unless it can demonstrate that the disparity in pay is made by virtue of a seniority system or a merit system. Alternatively, the employer may demonstrate the following five criteria:

1. That the pay differential is made pursuant to a seniority system or a merit system; or
2. That all five of the following are true:

a. “That the [pay] 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;
b. That the factor or factors are not based on, and do not perpetuate, a differential in
compensation based on sex or any other characteristic of members of a protected
class;
c. That each of the factors is applied reasonably;
d. That one or more of the factors account for the entire wage differential; and
e. That 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.”

Employment Discrimination Attorneys At McOmber McOmber & Luber, P.C. Advocate On Behalf Of Victims Of Employment Discrimination

If any of the above examples seem like your experience at work, please let us help you. The employment discrimination lawyers at McOmber McOmber & Luber, P.C. can help you. Call our Red Bank office at 732-842-6500, our Marlton office at 856-985-9800, our Newark office at 973-878-9040, or contact us at 888-396-0736 or online for a free consultation. We represent clients throughout New Jersey.