Laws in New Jersey and at Federal Level Prohibit “Pay Secrecy” Policies by Employers

Federal law and New Jersey state law generally prohibit wage discrimination, in which an employer pays different wages to employees of different genders who hold substantially similar positions or have substantially similar job duties. As the issue of wage disparity between male and female employees gains attention nationwide, understanding these laws is critically important. It can be difficult to establish that one employee has the same job as a higher-paid employee. Some employers, however, prevent workers from ever reaching that point by prohibiting their employees from disclosing or inquiring about wage information with co-workers. This practice, commonly known as “pay secrecy,” remains common despite laws prohibiting it at the federal and state levels.

The federal Equal Pay Act amended the Fair Labor Standards Act (FLSA) to ban payment of different wages to male and female employees for jobs requiring “equal skill, effort, and responsibility…performed under similar working conditions.” 29 U.S.C. § 206(d). The law allows exceptions for seniority, merit, and quantitative or qualitative factors, and the broadly-construed “differential based on any other factor other than sex.” Id. A bill that would have limited this last category, the Paycheck Fairness Act, died in the Senate in 2014. New Jersey law merely states that employers may not discriminate in the payment of wages based on sex, and it allows exceptions for any “reasonable factor or factors other than sex.” N.J. Rev. Stat. 34:11-56.2.

In order to assert their rights under federal or state wage discrimination laws, employees must know that a difference in wages exists. Many employers keep that from happening by enacting pay secrecy policies. Among private-sector employees, estimates of how many are subject to such policies range from one-third to more than 60 percent. Penalties for discussing pay rates or inquiring about pay rates can include anything from reprimands to termination.

Pay secrecy policies have violated federal law, at least in principle, for decades. The National Labor Relations Act (NLRA), first enacted in 1935, establishes the right of employees to organize for the purposes of collective bargaining and to engage in “concerted activities” towards that end. 29 U.S.C. § 157. This includes discussions regarding wages and differences in pay rates among employees. An employer commits an “unfair employment practice” if it “interfere[s] with, restrain[s], or coerce[s] employees in the exercise of the rights guaranteed in section 157.” 29 U.S.C. § 158(a)(1).

The NLRA has limitations, however. It does not apply to employees in supervisory roles, 29 U.S.C. § 152(3), and it generally does not allow private causes of action. The National Labor Relations Board (NLRB) is authorized to investigate and prosecute violations, and to enforce the law in court. 29 U.S.C. § 160. It has found employers in violation of the NLRA for pay secrecy policies, but it often limits its orders to injunctive relief. See, e.g. T-Mobile USA, Inc., et al, No. 28-CA-106758, ALJ dec. (NLRB, Mar. 18, 2015).

A bill signed into law in New Jersey in 2013 amended the New Jersey Law Against Discrimination (NJLAD) to prohibit employers from retaliating against employees for inquiring about pay, job titles, and other information. N.J. Rev. Stat. § 10:5-12(r). This statute allows workers to sue for damages, but the pay secrecy provision only applies if the purpose of an employee’s inquiry is to investigate possible employment discrimination.

If you need to speak to an gender discrimination attorney in New Jersey or New York, contact the Resnick Law Group today through our website, at 973-781-1204, or at (646) 867-7997.

More Blog Posts:

Proposed New York City Legislation Would Protect Independent Contractors from Wage Theft, The New Jersey Employment Law Firm Blog, January 21, 2016

New York Pizza Franchises Incur Judgments, Fines for Minimum Wage and Overtime Violations, The New Jersey Employment Law Firm Blog, May 15, 2015

Department of Labor Data Identify Employers with Most Wage Law Violations, Demonstrate Difficulties of Enforcement in “Fissured Workplaces”, The New Jersey Employment Law Firm Blog, September 9, 2014


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