New Jersey’s Equal Pay Bill Could Lead to More Wage Gap Disputes if Signed by Governor Christie

Guest Column By:
Dina M. Mastellone, Esq.


On March 14, 2016, legislation that would close the wage gap amongst women and men in New Jersey was sent to Governor Chris Christie for signature after passing both houses in the State Legislature. On average in New Jersey, studies have shown that women make 80.4 cents for each dollar a man earns, making it slightly more than the national average of 79 cents. Further, the wage gap is larger for African-American and Latina women, who make 58.1 cents and 42.7 cents, respectively, for every dollar men earn. If signed into law by the Governor, the new Equal Pay Bill (Senate Bill 992) will amend the New Jersey Law Against Discrimination (LAD). The Senate passed the Bill by a vote of 28-to-4 despite strong opposition from many New Jersey business groups. The Bill is modeled on the federal Lilly Ledbetter Fair Pay Act signed into law by President Barack Obama on January 29, 2009.


What Will the New Equal Pay Law Require?


If signed, the new law will apply to both public and private employers and would impose additional reporting requirements on state contractors. The two year statute of limitations for pay discrimination claims would restart with each unlawful paycheck that is issued by the employer. The new law would also allow employees to file claims after termination if the employee was unaware that the pay disparity existed during the course of his or her employment. The proposed bill will also expand back pay awards for successful plaintiffs for the entire period of time if the violations continued to occur within the statute of limitations. Employers will also be prohibited from requiring employees or prospective employees to consent to the shortening of the statute of limitations period or to waive any violations of the law.


The Equal Pay Bill will also require employers to prove that any disparity in pay was based on a factor other than sex, such as a seniority system, a merit system, training, education or experience (including position title), or the quantity or quality of production. Employers would also have to prove that reasonable application of these factors accounts for the entire wage differential, that the factors are job-related and consistent with job necessity, and that there were no other alternative business practices that would serve the same purposes without causing a difference in pay between female and male employees. Employers will also be prohibited from retaliating against employees for disclosing information about job title, occupational category, and rate of compensation of any employees or former employees.


Sate contractors will also be required to provide information on gender, race, job title, occupational category and compensation, and to report certain changes during the course of the contract. Contractors must report this information with the Labor Commissioner as well as the New Jersey Division of Civil Rights. The Bill also requires disclosure to employees and their authorized representatives upon request.


What Should Employers Do Now?


Given the increased fervor to close the pay gap for women and minorities, the advancement of the new Equal Pay Bill and U.S. Equal Employment Opportunity Commission’s (EEOC) new requirements with regard to EEO-1 pay data reporting beginning in 2017, the time is now for employers to begin to take preemptive action to correct any discriminatory pay practices that may exist. Employers should review and update their policies to ensure that employees are not discriminated against or retaliated against for discussing or questioning compensation. Employers must ensure that their wage rates in all of their operations and facilities are similar and should document that their pay-related decisions are based on a legitimate, business necessity. Managers and supervisors should also be trained to comply with the employer’s nondiscriminatory pay practices. Employers who are engaging in pay disparity can certainly expect an increase in pay discrimination cases both under the LAD as well as cases brought by the EEOC for illegal pay practices.


For more information regarding the potential impacts of this legislation and how to implement nondiscriminatory pay practices, please contact James Bucci, Esq, Partner at Genova Burns LLC’s Camden, New Jersey and Philadelphia, Pennsylvania offices at 856-968-0686 or jbucci@genovaburns.com or Dina M. Mastellone, Esq., Director of Genova Burns LLC’s Human Resources Practice Group, at 973-533-0777 or dmastellone@genovaburns.com.


DISCLAIMER: This client advisory is for general information purposes only. It does not constitute legal or tax advice, and may not be used and relied upon as a substitute for legal or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified attorney or tax practitioner licensed to practice in the jurisdiction where that advice is sought.