Pay Equity and Transparency Laws in New Jersey

Pay disparities among employees are a common form of employment discrimination. Wage gaps exist based on sex, race, and other categories that are protected by New Jersey employment laws. Addressing the problem can be difficult because the evidence is often hidden from view. Many employers have tried, for example, to prevent employees from discussing their wages. State and federal laws now protect employees’ ability to talk about how much they get paid, but a great deal of information remains concealed. A new pay transparency law in New York City requires employers to disclose pay ranges when they advertise job openings. So far, only one city in New Jersey has this type of law. Advocates for pay transparency laws say that they will help address wage gaps among employees.

Several laws address wage disparities and discrimination in New Jersey. These include the following issues:
– Pay equity;
– Attempts by employers to prevent employees from discussing their rates of pay; and
– Pay transparency.

Pay Equity

The federal Equal Pay Act (EPA), found at 29 U.S.C. § 206(d), prohibits wage discrimination based on sex or gender. Generally speaking, employers must pay employees of any gender the same amount for work that “requires equal skill, effort, and responsibility,” and that employees “perform[] under similar working conditions.” Exceptions include systems based on merit, seniority, “quantity or quality of production,” or “any other factor other than sex.”

At the state level, the New Jersey Law Against Discrimination (NJLAD) prohibits discrimination in pay based on any protected category, not just sex. The exceptions are also narrower than those found in the EPA. The law allows exceptions for seniority and merit-based systems. For other pay disparities, an employer must satisfy a five-part test found in § 10:5-12(t) of the New Jersey Revised Statutes. One of the five elements requires evidence that the disparity is not only not based on a protected category, but also that it does not perpetuate unlawful disparities in pay.

A law passed by the New Jersey Legislature in 2019 also prohibits employers from screening job applicants based on salary history. Violations of this law could result in liability under the NJLAD if the job applicant is part of a protected class.

Discussions of Pay

The NJLAD prohibits employers from taking adverse action against an employee who:
– Asks other employees about their wages; or
– Discloses to another employee how much they get paid.
It further bars employers from requiring employees to sign non-disclosure agreements regarding wages or salary.

Federal law also protects employees’ ability to discuss their pay. Section 7 of the National Labor Relations Act protects workers’ right to engage in activities related to labor organizing. This often involves discussions about wages.

Pay Transparency

While the laws discussed above mainly address what employers may not do, pay transparency laws impose affirmative obligations on employers to publish information about wages or salaries. A pay transparency law took effect in Jersey City in April 2022. It applies to all employers in the city with five or more employees. Any job posting by a covered employer must include “a minimum and maximum salary and/or hourly wage, and benefits.” A similar law took effect in New York City in November 2022.

If you believe your employer has subjected you to unlawful workplace practices in New Jersey or New York, you need an experienced advocate on your side. The employment attorneys at the Resnick Law Group are available to discuss your rights and options. Please contact us online, at 973-781-1204, or at 646-867-7997 today to schedule a confidential consultation.

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