Effective July 1, 2018, the Diane B. Allen Equal Pay Act amends the New Jersey Law Against Discrimination (NJLAD) by providing enhanced equal pay protections for New Jersey employees.
NJLAD prohibits all public and private employers from engaging in pay discrimination on the basis of gender, race, ethnicity, military status, or national origin, in addition to other protected characteristics.
The new amendment prohibits pay disparities based upon characteristics protected by the NJLAD and specifically makes it an unlawful employment practice “for an employer to pay any of its employees who are 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.”
Additionally, the amendment also provides that, other than instances where a seniority or merit-based system is utilized, employers are only permitted to pay employees a different rate of compensation for substantially similar work if the employer can show that:
- The pay differential is based on one or more legitimate, bona fide factors, such as training, education or experience, or the quantity or quality of production.
- The bona fide factors are not based on, and do not perpetuate a differential in compensation based on sex, or any other protected characteristic;
- Each of the bona fide factors are applied reasonably;
- One or more of the bona fide factors account for the entire wage differential; and
- The bona fide factors are job-related with respect to the position in question and based on legitimate business necessities, unless it is demonstrated that there are alternative business practices that would serve the same business purpose without producing a wage difference.
The amendment also extends NJLAD’s anti-retaliation protections to equal pay claims by prohibiting retaliation against employees for “requesting from, discussing with, or disclosing to, any other employee or former employee of the employer, a lawyer from whom the employee seeks legal advice, or any government agency” equity pay information.
Equity pay information could include job title, occupational category, rate of compensation, including benefits, and the gender, race, ethnicity, military status, or national origin of the employee or any other employee or former employee, regardless of whether the employee receives a response.
The new NJLAD amendment also increases recoverable damages and extends the statute of limitations for pay equity violations to six years. Each payment of unlawfully disparate wages or other compensation constitutes a separate offense.
Employees may be able to recover treble damages if they can show they were discriminated against on the basis of pay, if they were retaliated against for raising the issue of pay disparity to an employer or other employees, or if they were required to waive their rights to complain about pay disparities.
The new provision allowing for treble damages means that a court could decide to triple the amount of the compensatory damages to be awarded to a prevailing plaintiff. An employee may also be able to recover punitive damages if a court finds that an employer’s conduct was willful.
New Jersey employers should review and update their existing pay policies and practices to ensure compliance with the new law.
The information on this website is intended as general legal information only and should not form the basis of legal advice of any kind. Individuals seeking specific legal advice should consult a lawyer.