Articles Posted in Equal Pay Act

New Jersey maintains a strong public policy in protecting employees who speak out against the employer’s for engaging in unlawful business activities.  The law recognizes that employers are responsible when they try to silence and hurt persons who oppose workplace conduct or activities that endangers people in the workplace and the public at large.  However, while New Jersey law clearly provides for immense legal protections for employees against workplace retaliation, this does not mean anyone who is fired for complaining to his or her employer will be successful in a claim for wrongful termination.

New Jersey first enacted its state whistleblower law, the New Jersey’s Conscientious Employee Protection Act (“CEPA”) in 1986. CEPA is broad in scope and considered as one of the farthest reaching state whistleblower laws in the entire country. CEPA is remedial legislation and is entitled to liberal construction by our courts.

Under of New Jersey’s whistleblower law, a worker cannot be terminated for opposing or refusing to participate in unlawful or certain other improper conduct of the employer.  By placing stiff penalties upon employers who violate the whistleblower law, the New Jersey anti-retaliation statute tries to discourage employers from engaging in illegal or unethical workplace activities.  The state law applies to private and public employers and employees.  It also can apply to independent contractors in certain circumstances depending on the specific facts and circumstances of the business relationship.

On February 19, 2019, Governor Phil Murphy signed into law an extensive expansion of New Jersey’s paid Family Leave Insurance program and amends the New Jersey Family Leave Act. The New Jersey paid family leave program, which is about 10 years old, provides employees with paid leave for qualifying reasons to care for a newborn, adopted child or sick relative.  The New Jersey Family Leave Act, which was adopted in 1989, provides for eligible employees the right to take up to 12 weeks off from work in a 24 month period in order to care for a family member who is suffering from a serious health condition or upon the birth or adoption of a child.The new expansion of the paid family leave law extends paid benefits to eligible employees from six weeks to twelve weeks.  The new law will also make the benefits payable at a higher rate. Currently, benefits pay out two-thirds of an employee’s pay, capped at $633 per week. The enhanced benefits will entitle eligible workers to 80% of their wages, up to $860 per week. Further, the law was also expanded with regard to intermittent leave, increasing the entitlement from 42 days to 56 days, beginning July 2020.

In 2008, New Jersey followed in California’s footsteps and became the second state to enact paid family leave. Unfortunately, awareness of the program and its benefits has not been widespread. A 2017 study showed that only 12% of New Jersey’s eligible new parents were receiving family leave benefits. The recent enhancements signed by Governor Murphy were previously vetoed in 2017 by then Governor Chris Christie, who stated that such an expansion would be too expensive for New Jersey workers to bear.

The amendments will also change the New Jersey Family Leave Act by providing job protections to employees of private businesses that have at least 30 employees.  This change in the New Jersey Family Leave Act will become effective as of June 30, 2019.  This change represents an expansion over the old law, which only provided protections to employees of private businesses with at least 50 employees.  The program is funded through payroll deductions paid by every single New Jersey employee.  As of January 1, every New Jersey worker is contributing based on their initial $34,400 in wages, for a maximum contribution of $27.52 per year.

The “Diane B. Allen” New Jersey Equal Pay Act was enacted in April 2018, and made effective as of July 1, 2018. In passing the Equal Pay Act, the legislature did not expressly state that the law would be applied retroactively to claims that arise before July 1, 2018.  In September 2018, the first court decision applying the New Jersey Equal Pay Act was decided by the United States District Judge William Martini of the District of New Jersey in Perrotto v. Morgan Advanced Materials, which held that that the New Jersey Equal Pay Act should not be applied retroactively since the legislature did not specifically provide so.

Since its enactment, the New Jersey Equal Pay Act has widely been recognized as providing the strongest protections to workers of any equal pay law in the United States.  The New Jersey Equal Pay Act, which amended New Jersey’s Law Against Discrimination, prohibits discriminatory pay practices for protected classes for performing substantially similar work. The law is not limited to gender-based pay discrimination, but also includes other protected classes such as race, disability and age. Under the law, an illegal employment practice occurs every time an employee is impacted by a discriminatory compensation decision.

The New Jersey Equal Pay Act also provides for broad protections against retaliation for employees who seek redress from discriminatory pay practices. Specifically, it prohibits an employer from taking reprisals against any employee for requesting from, disclosing with, or disclosing to an employee or former employee or a lawyer from whom he or is she seeking legal advice or governmental agency for information regarding the job title, occupational category, and rate of compensation on the basis of a protected trait such as sex, race, disability, age or others.

In July 2018 Elizabeth Rowe, the principal flutist and Walter Piston chair in the Boston Symphony Orchestra (“BSO”), filed a gender discrimination lawsuit alleging that the BSO violated the newly enacted Massachusetts Equal Pay Act.  Rowe argues that the BSO was paying her less to perform substantially similar work – when viewed in terms of skill, effort, and responsibility – than it was paying her male counterparts, simply because she was a woman and they were men.  Gender is a protected class, under the Massachusetts Equal Pay Act and most other civil rights statutes, and discriminating on the basis of one’s membership in a protected class is against the law.

Rowe framed her argument by pointing to one of her BSO colleagues, the orchestra’s principal oboist John Ferrillo.  As another principal in the orchestra, Ferrillo holds a similar position to Rowe, and yet his salary is nearly $65,000 greater than hers. Comparing these two positions is naturally an imperfect exercise, as an oboe and a flute are obviously different instruments.  A rough approximation can be made by looking at one piece of objective data: since joining the BSO in 2004, Rowe has performed as a soloist 27 times, while Ferrillo has performed as a soloist just 14 times.  Notably, Ferrillo supports Rowe’s efforts to obtain equal pay.  At the request of Rowe’s employment attorney, Ferrillo provided a statement of his opinion that Rowe was “every bit [his] match in skill, if not more so.”

Rowe’s case provides a look at the problem of gender discrimination on the individual level, but it is a systemic issue in orchestras, and can be difficult to isolate due to the many factors that impact salary decisions.  The BSO has raised some of these factors in defending the discrepancy in Rowe’s pay: the talent pool for certain instruments is deeper and thus they are in lower demand; individual players can be uniquely talented leading to a bidding war over their services; random factors akin to ‘right time, right place’ can come into play.  When looking at some nation-wide statistics, however, these explanations become dubious.  As the Washington Post reported, an analysis of 78 top-earners from 21 orchestras in the United States shows that: (1) 82% of those top-earners are men; (2) the men in the pool make on average just over $52,000 more than the women; and (3) the top male earner makes $535,789 while the top female earner makes only $410,912.

Wage Gap in the Legal Field

The legal field is supposed to be predicated on justice, equality, and law abiding. While the legal industry should set the standard for respecting laws and providing fair treatment for employees and clients, this is not always the case.  Reports regarding cases in which law firms neglect to follow federal and state laws or allow discriminatory behavior to occur in the workplace tend to surprise many people. One area that law firms are particularly deficient in is that of pay equality. Studies as well as an abundance of recent court cases have shown that firms, particularly those in the BigLaw classification, consistently neglect to compensate their female employees equally in comparison to their male counterparts.

According to a survey conducted in 2016, male partners on average earned salaries that were 44% higher than those of female partners. The average salary of male partners in 2016 was $949,000, while females earned $656,000. Further, an article in the ABA journal states that women make up only 15% of the total amount of equity partners in law firms nationwide, meaning that 85% of these equity partners are men. This gap is typically not explainable by a difference in education or experience, and has also widened as the number of female equity partners has barely increased in recent years. A report produced by the American Bar Association contends that because compensation drives behavior, fair and equitable payment practices bear incredible importance to the success of a firm. An employee’s compensation influences their sense of self worth and how valuable they feel to their employer and therefore discriminatory pay practices are inherently damaging to both employees and their workplace. As part of an effort to increase transparency and lessen the gap in salaries, the United Kingdom has adopted a law that forces all employers with a certain amount of employees to publicly release the differences in pay between men and women. As many of the large law firms in the United Kingdom also have strong presences in the United States, the data that has been released can be used to infer the extent of these issues in our country as well. DLA Piper, for example, reported that men at the company earn 17.8% more than women on average. Norton Rose reported a similar percentage. Weil Gotshal & Manges, on the other hand, even when they removed those in secretarial roles, reported an average gender pay gap of 24.95%.

Defenders of labor rights face an uphill battle addressing the widespread abuses facing workers around the world.  Most industrialized nations have legal protections in place establishing standards for labor conditions, but in many parts of the world this is not the case. In our globalized economy, corporations in industrialized nations take advantage of this reality and set their manufacturing and production operations to those nations, to access relatively inexpensive labor.  In the worst of these cases, workers have no protections whatsoever, and live in slavery. Recently, a United States federal court took a step to hold some of these companies responsible, for being at least complicit in a system supported by slavery, as the court put it in “receiving cocoa at a price that would not be obtainable without employing child slave labor.”

Last month the Ninth Circuit Court of Appeals reversed the decision of a California District Court Judge’s in the case John Doe I, et. al. v. Nestle, S.A., et. al.  In this case, the unnamed plaintiffs allege that a group of corporate defendants in the business of processing cocoa beans were complicit in a system of widespread child slavery that occurred on cocoa plantations in the Republic of Côte d’Ivoire, a nation on the West African coast.   The plaintiffs in the case, identified only as John Doe’s I–VI, allege that they were victimized by these companies and the decisions those companies made in pursuing profits, up to and including condoning the use of child slave labor on the plantations of their cocoa suppliers.

The defendants in this case, Nestle, Cargill, and Archer Daniels Midland, are each large multinational corporations and are among the world’s largest manufacturers, purchasers, processors, and retail sellers of cocoa beans.  The plaintiffs are not U.S. citizens, but were able to file their suit in U.S. Federal Court on the basis of the Alien Tort Statute, or the “ATS.”  That statute, originally passed in the Judiciary Act of 1789, provides original jurisdiction to the federal courts for foreign citizens to seek redress for harms suffered as the result of a tort committed in violation of the law of nations. Among other torts, courts have found torture, genocide, war crimes, and slavery to be actionable under the ATS.

The United States has historically been plagued by systematic employment discrimination based on protected characteristics that often take the form of unjustifiable wage disparity. The Diane B. Allen New Jersey Equal Pay Act attempts to curb this practice in New Jersey by placing strict regulations in situations where employers pay their employees disparate wages, and imposing large penalties on employers who violate this statute. Governor Phil Murphy signed the bill into law on April 24, 2018 in hopes of creating a work environment in the state that fosters pay equity. It takes effect, today, July 1, 2018.

The Equal Pay Act amends the New Jersey Law Against Discrimination to strengthen protections against discrimination by specifically prohibiting unfair pay practices based on gender, race, or other characteristics. It restricts employers from paying employees who are members of protected classes reduced wages in comparison to non-protected class employees by making it unlawful for women to be paid less than their male counterparts simply because of their gender. An employer may utilize differing compensation rates only pursuant to:

  • A seniority or merit system

Most people know that it is against the law for employers to not pay their employees their earned wages.  But what if you are not an employee, but instead making a living as a freelance worker.  Because freelance workers are not considered employees, the laws that require employers to pay its employees their wages, such as the New Jersey Wage Payment Act and federal Fair Labor Standards Act, do not apply to freelancers.  While there are some laws such as the Independent Sales Representative Rights Act that protect independent sales representatives from not being paid their earned sales commissions, there is no specific law to protect many freelance workers. As a result, companies are far too often stiffing their non-employees from being paid their earned compensation.

New Jersey lawmakers have recognized this as a serious problem in today’s workforce and are now attempting to pass legislation to protect freelance workers from getting paid their earned compensation.  Assembly Bill No. 1526, approved on May 18, 2018, mandates that contracts between a company and a freelance worker, must now be in writing, and provides for severe penalties against companies for shirking their duty to  pay a freelance worker the compensation they are owed.

The bill requires a client to pay a freelance worker his or her compensation earned according to the work terms agreed to with the client.  If there is no agreement, payment shall be paid no later than 30 days after completion of the work or services performed.  The bill defines the term “client” to be any “sole proprietorship, partnership, corporation, limited liability company, association, other business entity or nonprofit organization in which that business has contracted with a freelance worker for compensation equal to or greater than $600.”

Governor Phil Murphy has signed into law the “Diane B. Allen Equal Pay Act”, which is rightfully being touted as the strongest equal pay law in the United States.  The New Jersey Equal Pay Act amends the New Jersey Law Against Discrimination to specifically protect employees from discriminatory pay practices.  It provides severe penalties to employers who violate the new law.

The New Jersey Equal Pay Act, which will be effective immediately on July 1, 2018, specifically prohibits employers from paying employees less than other employers because of their gender, race or other protected class.  Employers must be able to refute a claim of wage discrimination by showing that any difference in pay is based upon a seniority system, a merit system or other legitimate bona fide factors (e.g. training, education, experience, quality or quantity of work).

The new law also provides some significant changes to the applicable statute of limitations.  For example, the New Jersey Equal Pay Act strengthens the statute of limitations for claims based on pay equity to a period of six (6) years as opposed to the two (2) year statute of limitations

Less than one week from Opening Day of the major league baseball season, Congress has passed legislation that will exempt minor league baseball players from the wage protections mandated under the federal Fair Labor Standard Act (“FLSA”).  This means that Major League Baseball and Minor League Baseball will not be required to pay their minor league baseball players a minimum wage, any overtime pay, or any compensation for spring training or during the off season.

The legislation will also likely put an end to a pending lawsuit brought by minor league players in which they are attempting to gain the legal wage protections available under the FLSA.  The lawsuit was filed in 2014 by lead plaintiff and former minor leaguer, Aaron Senne, who argued on behalf of himself and other minor league baseball players, that Major League Baseball and Minor League Baseball were violating the FLSA by not paying the players minimum wage and overtime pay.  Most minor league players make less than $7,500 a season and work between 50-60 hours a week during the season without factoring in travel time.  Minor league games take place six to seven days a week and require extensive travel for the players.

The FLSA requires that employers pay covered employees no less than $7.25 for every hour worked.  Most states have similar minimum wage laws in place, such as New Jersey that has enacted the New Jersey Wage and Hour Act.  The New Jersey Wage and Hour Act currently mandates employers pay eligible employees a minimum wage of $8.60 per hour.  The FLSA also requires that employers pay covered employees overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.  The New Jersey Wage and Hour law contains the same provision requiring employees provide eligible employees with overtime compensation.