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New Jersey's Plans to Expand Equal Pay Protections

May 31, 2018 4:30:00 PM

Senate Bill 104, effective July 1, 2018, has been enacted by the state of New Jersey. This bill amends the New Jersey Law Against Discrimination (LAD) that prohibits employers from, “paying an employee who is a ‘member of a protected class’ for substantially similar work, when viewed as a composite of skill, effort, and responsibility.” Employers who have unlawful pay differentials are not allowed to reduce the pay of an employee in order to comply with this law. When noting compensation, all forms of pay, including benefits, should be included.

The law states the protected classes as such:

Race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces.

With regards to pay differentials, they are only permitted with the differential is made in accordance with a seniority or merit system. The employer could also choose to demonstrate any of the following:

  • The 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;
  • The factor(s) are not based on, and do not perpetuate, a differential in compensation based on any characteristic of members of a protected class;
  • Each of the factors is applied reasonably;
  • One or more of the factors account for the entire wage differential; and
  • The factors are job-related and based on a legitimate business necessity and there are no alternative business practices that would serve the same business purpose without producing the wage differential.

Senate Bill 104 also clarifies actions in regards to the Right to Discuss and Disclose Wages. The current law prohibits employers from taking any sort of action against an employee for requesting information from another employee (or former co-worker) including: job title, occupational category, rate of pay, gender, race, ethnicity, military status, and national origin. Bill 104 further clarifies that employees are also protected if they discuss the above information with a current OR former employee. It also adds that an employee is protected when seeking, or discussing, legal advice from a government agency or lawyer.

Finally, Senate Bill 104 requires that any employer entering into a contract with the state provide the following information, concerning their employee’s hours worked and rate of pay, with ties to the contract:

  • Gender
  • Race
  • Ethnicity
  • Job Category

If you are an employer located in New Jersey, we recommend going over the bill yourself in order to make sure your company, and employees, will be compliant with these new laws. You can read Senate Bill 104 in its entirety HERE.

 

Bibliography

ADP . (2018, April). ADP Research Institute . Retrieved from ADP: https://www.adp.com/tools-and-resources/adp-research-institute/insights/insight-item-detail.aspx?id=A9A11054-2C31-4F5A-A47B-676042A40F62

 

 

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