NEW JERSEY — Governor Phil Murphy said that he will sign an aggressive pay equity bill on April 24 that aims to close the salary gap between men and women. New Jersey lawmakers recently 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.
The bill, NJ A1 (18R), would prohibit unequal pay for “substantially similar work” and allow employees who have been discriminated against to receive up to six years of back pay. Murphy, who campaigned on the need to close the gender wage gap, tweeted the announcement Tuesday, April 10, which is also “Equal Pay Day.”
“There is no reason a woman in New Jersey should earn just 82 cents to the dollar made by a male for the same work,” he wrote on Twitter. “That’s why, two weeks from now on April 24, I will sign into law the most sweeping equal pay legislation in America to close the gender wage gap. #EqualPayDay.”
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.
These new changes are likely to cause a major compliance headache for New Jersey employers, and it is ital to examine the fairness of their pay systems not only for women, but other protected groups as outlined in the examples above.
Employers in New Jersey must begin to 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.
For more information on how this law will affect your business, click here to read the detailed article by Wiss & Company, LLP.
Lisa Calick, SPHR, Director of Human Resources Advisory Group at Wiss, contributed to this article. She is responsible for providing HR solutions to both colleagues and clients at Wiss & Company, LLP. You can contact Lisa at (973) 577-2877 or lcalick@wiss.com.
