A "historic" bill protecting women and minorities in the state from pay discrimination passed both houses of the state Legislature last Monday, and Governor Phillip Murphy has pledged to sign it into law as soon as it gets to his desk.
When signed, the law will:
- make it unlawful for an employer to offer lower pay and benefits to a worker protected by the state Law Against Discrimination, which includes "protected classes" such as women and minorities, compared with others who perform "substantially similar work;"
- prevent employers from disciplining workers who talk about their “compensation” - which includes wages and benefits - with co-workers and lawyers;
- prohibit employers from cutting the wages of higher-paid staff in order to make salaries comparable;
- permit employees, or a group of employees, to recoup up to six years’ worth of back pay, up from two under current law; and
- allow employees to recoup three times as much as they were denied in compensation.
“It’s a game changer” says John Sarno, president of the Employers Association of New Jersey. “Quite frankly, most employers have no idea what this means.”
The bill mandates equal pay, inclusive of benefits, for work which is deemed “substantially similar.”
Whether two different jobs involve substantially similar work is determined by an assessment of the “skill, effort and responsibility” for each position.
In order to justify any differences in pay between substantially similar jobs, it would be the employer’s obligation to prove that such differences were either due to a seniority system or merit system, or factors other than sex, such as training, education or experience, or the quantity or quality of the employee’s production.
Further, the employer must demonstrate that any factors it relied on to make this determination does not perpetuate any sex-related differences in compensation.
The employer must prove that the factors it uses are “job-related with respect to the position in question and based on a legitimate business necessity.”
The bill also contains a provision related to protecting employees in seeking and obtaining information regarding their pay and the pay of other employees, says Sarno.
“It’s going to be difficult for employers to suppress discussion about wages between employees among themselves and with their lawyers. It risks another level of litigation to discipline or fire them” he adds.
The bill also directs the Commissioner of the N.J. Department of Labor and Workforce Development to issue regulations requiring employers entering state contracts to disclose and file employee compensation information to the state in the form of “pay bands.”
The EANJ legal staff will be presenting a one-hour update that will cover what New Jersey employers need to know on Tuesday, May 15, 2018.