On April 24, 2018, New Jersey Governor Phil Murphy signed the Diane B. Allen Equal Pay Act (the “Act”) into law. The Act, which will take effect on July 1, 2018, amends the New Jersey Law Against Discrimination (“LAD”) to make discrimination in wages on the basis of any protected class an unlawful employment practice. Protected classes under the Act include race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces.
The Act states that it is unlawful for an employer to pay any of its employees who is a member of a protected class at a rate of compensation, including benefits, which is less than the rate paid by the employer to employees who are not members of the protected class for substantially similar work. Exceptions for pay disparities under the Act include: (1) employer-established seniority or merit systems; and (2) differentials based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class (like training, education, experience, or the quantity or quality of production). The bona fide factors must be job-related with respect to the position in question and based on a legitimate business necessity, where there is no alternative business practice that would serve the same business purpose without producing the wage differential.
The Act also contains anti-retaliation provisions that allow disclosure or discussion of compensation among employees and with legal counsel. Furthermore, the Act prohibits an employer from requiring an employee to sign a waiver or agreement to not make any such requests or disclosures regarding compensation.
The Act increases damages available to a prevailing employee in a lawsuit filed thereunder. Under the Act, if a jury determines an employer discriminated on the basis of pay, the employee will be awarded treble damages representing three times the amount of the pay differential.
Takeaway for Employers
Although the Act does not go into effect until July 1, 2018, employers should proactively take steps to ensure their existing pay practices and policies result in equal pay for employees who do substantially similar work. We encourage you to contact us for assistance in complying with the Act.
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If you have any questions regarding this alert, or any other issue, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.