New Jersey's Equal Pay Act

New Jersey’s relatively new Equal Pay Act provides equal pay protections to all minorities and protected classes. Although New Jersey already has a law prohibiting discrimination in pay based on sex under N.J.S.A. 34:11-56.2, the new Equal Pay Act goes even further and extends to equal pay protections to all protected classifications of sex, race/ color, national origin/ancestry, religion/creed, disability, age, pregnancy, marital status, sexual orientation, gender identity, N.J.S.A. 10:5-12(a). The Equal Pay Act also has a six (6) year statute of limitations, where LAD only has a two (2) year statute of limitations. Under the new law a discriminatory compensation decision or other employment practice that is unlawful under the New Jersey Law Against Discrimination (LAD) occurs each time that compensation is paid in furtherance of that discriminatory decision or practice – effectively making each paycheck another instance of discrimination.

As of July 1, 2018 when the Equal Pay Act took effect, it is an unlawful employment practice for employers to pay less in wages, benefits, or compensation to members of a protected class for “substantially similar work, when viewed as a composite of skill, effort and responsibility” as those not in a protected class. Put differently, if an employer pays one employee more than another who falls under a protected classification, the employer will have to show permissible exceptions for the pay disparities. Such exceptions include a seniority system, a merit system or a bona fide factor other than the characteristics of the members of the protected class. “Bona fide factors” can include training, education, experience, performance, productivity, and skill sets.

“Substantially similar work” is undefined by the statute, but our state courts are likely to find mere job title irrelevant. Courts will be required to analyze the nature of the work itself in determining whether an employer is violating the Equal Pay Act by paying less to women and other protected class members for the same work as their colleagues. Put differently, even if employees hold different positions, as long as they have the same level of responsibility, manage the same amount of budget, maintain the same working conditions, and oversee the same number of employees, a comparison can be established to analyze any compensation gap.

The Equal Pay Act also prohibits retaliation against workers who discuss compensation with other co-workers. It will be unlawful for employers to take reprisals against employees for requesting from, discussing with, or disclosing to: (1) another employee or former employee, (2) a lawyer from whom the employee seeks legal advice, or (3) any government agency, information related to employee compensation.

A provision in the Equal Pay Act forbids employers from retaliating against employees who refuse to sign sign waivers of their rights under LAD. This means that an employer who fires or refuses to hire an employee for refusing to sign an agreement such as an arbitration agreement waiving the employee’s right to have his or her discrimination claims decided before a jury at trial, will be deemed to have violated the Equal Pay Act.

The remedies to prevailing employees under the Equal Pay Act are extensive. Under the LAD, prevailing employees can be awarded compensatory damages, attorneys fees, costs, and punitive damages for willful acts. Now, under the Equal Pay Act, prevailing employees may obtain these same remedies along with up to 6 years of back pay and treble (three times) damages for violations. This means the statute of limitations under the Equal Pay Act is three times longer than the two year statute of limitations for discrimination claims brought under New Jersey’s Law3 Against Discrimination. The text of the Equal Pay Act may be found at http://www.njleg.state.nj.us/2018/Bills/S0500/104_R2.PDF The Equal Pay Act is not retroactive, meaning it does not apply to unequal pay claims which occurred prior to July 1, 2018.

If you are a member of a protected class due to your, sex, race, national origin, etc., and you believe that you are being paid less for substantially similar work as compared to other employees not in a protected class, please call us today to discuss your legal options at (732) 536-6161 or fill out the contact form on this page for immediate help. The attorneys at Mashel Law, located in Marlboro, New Jersey, are dedicated to protecting the rights of employees.