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Division of Civil Rights Publishes New Jersey Equal Pay Act Guidelines

The New Jersey Division of Civil Rights has published its guidelines concerning the administration of the New Jersey Diane B. Allen Equal Pay Act.  The New Jersey Equal Pay Act, first enacted into law in 2018, makes it unlawful for employers to engage in discriminatory compensation practices and retaliate against employees for complaining about workplace wage related issues.  The guidelines issued by the New Jersey Division of Civil Rights will assist employers, employees, lawyers and judges on how to interpret the equal pay law in situations involving workplace wage discrimination and wage disparity.

IMG_3572-300x169The New Jersey Equal Pay Act prohibits employers from paying employees who are members of a protected class less than their counterparts who perform substantially similar work and are not in a protected class.  Unlike many other state equal pay laws, protected classes under the New Jersey equal pay statute are not limited to gender and instead include all other protected classes under the Law Against Discrimination such as age, sexual orientation, race, disability, national origin and others.

The New Jersey Equal Pay Act amended the New Jersey Law Against Discrimination to provide for significant penalties to employers who violate the law.  In addition to an award of back pay for up to six (6) years from the date of the last unlawful pay occurrence, the law allows an employee to recover an additional amount equal to three (3) years of the awarded back pay monetary amount as treble damages.

Under N.J.S.A. §10:5-12(t) of the NJ equal pay statute, there is no violation of the law unless it is shown that employees in the protected class are or were performing “substantially similar work, when viewed as a composite skills, effort and responsibility” than the comparable employee(s) who are or were being paid at a higher rate. The guidelines issued by the Division of Civil Rights reiterate that the employer must demonstrate that the pay differential is made pursuant to a seniority system or a merit system, or, the alternative, all the following five criteria are met:

  • That 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 of quality of production;
  • That the factor or factors are not based on, and do not perpetuate, a differential in compensation based upon sex or other characteristics of members of a protected class;
  • That each of the factors is applied reasonably;
  • That one or more of the factors amount for the entire wage differential; and
  • 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.

The above criteria are set forth in N.J.S.A. §10:5-12(t).

The Division of Civil Rights Act also outlined the new anti-retaliation provisions enacted as part of the New Jersey Equal Pay Act, which now covers a broader range of conduct that constitutes protected activity.  Under N.J.S.A. §10:5-12(r), employers cannot take reprisals against employees for requesting, discussing with, or disclosing information concerning the employee compensation, job title, occupational categories and protected traits of employee to any other employee or former employee of the employer and attempting to seek legal advice from a lawyer or governmental agency concerning their rights under the statute.

Nearly all employers in New Jersey are covered by the Equal Pay Act.  There is no minimum number of employees and the employer need not be located in New Jersey, as long as it has employees with a primary place of work in New Jersey.  Nearly all employees are covered by the law, including full-time employees, part-time employees, seasonal employees, per-diem employees and temporary employees.  The Equal Pay Act does not apply to federal government employers and does not apply to federal employees, domestic employees and independent contractors.

There are new reporting requirements under the New Jersey Equal Pay Act that all employers should be aware.  For example, any employer who enters into a contract with the State of New Jersey or an instrumentality of the State of New Jersey for “qualifying services” and/or “public works” must submit wage and demographic data for all employees who are employed in connection with the contracts to the Department of Labor and Workforce Development.  The new reporting requirements are enforced by the Commission of the Department of Labor and Workforce Development.

The Division of Civil Rights published guidance of the New Jersey Equal Pay Act includes Frequently Asked Questions section regarding the statute.  Additionally, there is a one-page fact sheet that can be found on the Division of Civil Rights website. If you believe that you or a family member are not being paid in accordance with the New Jersey Equal Pay Act, it is always advisable that you contact an experienced equal pay lawyer, who can assess the viability of a potential claim and provide advice and counsel concerning your rights under the equal pay law.