On March 26, 2018, the Diane B. Allen Equal Pay Act was passed by the New Jersey Legislature. The Act was subsequently signed into law by Governor Phil Murphy on April 24, 2018, and took effect on July 1, 2018. This important piece of legislation mandated equal pay for employees protected under the New Jersey Law Against Discrimination (NJLAD). For more on the Diane B. Allen Equal Pay Act and what it protects for New Jersey employees across the state, read on.
Under the Diane B. Allen Equal Pay Act, employers are required to compensate employees protected from discrimination under the NJLAD. This means that employers must compensate such protected employees at the same rate of compensation as those non-protected employees who engage in “substantially similar work.” The only allowable deviation from this is if the pay discrepancy is justified by a legitimate business need that falls in line with provisions of the Act.
Who is considered a protected employee pursuant to the NJLAD? An employee will be considered a member of a protected class based on a characteristic listed in the NJLAD that is prevented from serving as the basis of any employment decision for that particular employment. Protected characteristics include:
- Age
- Disability
- Marital Status
- National Origin
- Pregnancy
- Race
- Sex
- Sexual Orientation
Those members of a protected class cannot be compensated at a lower rate than an employee who is not a member of a protected class for substantially similar work. For purposes of this Act, compensation also includes employment benefits. To determine whether employees engage in substantially similar work, the skill and effort, as well as the employment responsibilities required by the work will all be considered.
The Act does even more than requiring equal pay for substantially similar work. The Act also protects employees from retaliatory actions should they seek legal advice for rights under the NJLAD. Furthermore, the act prohibits retaliation should an employee share information regarding NJLAD issues with legal counsel or a government entity or request, discuss, or disclose to a current or former employee of the same employer, to legal counsel when seeking legal advice, or a government entity, information about job title, compensation, or other aspects regarding a protected status.
An employer is also prevented from making a waiver of protections granted by the NJLAD a condition of employment or making consent to a restricted time frame within which the employee can bring a timely NJLAD claim a condition of employment. Under the Act, an unlawful employment practice is said to occur every time an employee feels the effects of a discriminatory compensation practice. This means that a violation of protections is said to occur every time wages are paid to the employee.
The NJLAD has specific remedies for employees impacted by unlawful employment practices. In addition to these remedies, an employee who experiences pay discrimination has the right to seek back pay for the entire period of a continuous violation. The maximum time frame for recovering back pay is six years as long as the violations fall within the allowable statute of limitations. In some cases, an employee who has experienced pay discrimination may be entitled to treble damages as provided for under the Act.
Employment Law Attorneys
Have you been the victim of discriminatory payment practices in New Jersey? Get in touch with the trusted employment law attorneys at Castronovo & McKinney. Contact us today.
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Today Governor Phil Murphy signed into law the Diane B. Allen Equal Pay Act (“Equal Pay Act”), which modifies the New Jersey Law Against Discrimination (“NJLAD”) and is viewed as one of the, if not the broadest equal pay law in the nation.
With significant changes to the NJLAD, there is no doubt that the new equal pay law is an invitation for increased litigation. The drafting of the legislation raises a number of questions for employers as to what this law actually does and how this law impacts them. To assist, below are answers to some of the biggest questions employers may have about the Equal Pay Act.
- Wasn’t “equal pay” already the law in New Jersey?
Yes. However, this law fundamentally redefines what it means to be “equal.”
- So who do I have to pay equally under this new law?
Under the law, it will be unlawful to pay (including benefits) an employee protected under NJLAD less than another individual not in that employee’s protected class for “substantially similar work.” In comparing employees, the employer must look at all of its operations or facilities. For example, an employer could not pay a white woman who works in its Newark office less than a white man who works in its West Orange office or a woman with a disability less than a woman without a disability for substantially similar work.
Importantly, the employee does not have to prove that the wage difference is due to her being a member of a protected class; instead, the employee merely must show that she is being paid less for substantially similar work and is a member of a protected class.
Employers are not absolutely barred from paying covered protected individuals less. Instead, the employer must be able to prove that the wage difference is due to a seniority system or merit system or due to some other legitimate factor—such as training, education, or experience—that is based on a business necessity.
- How long does an employee have to file a lawsuit?
The law has not changed in this area. Employees have two years to file a claim for a violation of the NJLAD. However, each time a paycheck is issued, a new violation occurs, which restarts the two year period to file a claim.
- What damages can a successful employee receive?
A successful employee may receive up to six years of damages, so long as one violation occurs with the two year statute of limitations period. In addition, successful employees are now entitled to three-time damages.
- Can I ask my employee to waive their rights or shorten the statute of limitations?
No. While employers were already prohibited from asking employees to shorten the statute of limitations, employers now also cannot ask their employees to waive any rights under the NJLAD.
- Can I prohibit my employees from discussing their wages?
No. While most employers were already not allowed to prohibit their employees from discussing wages under the National Labor Relations Act, now all employers in New Jersey are prohibited from the same.
- Can I decrease some employees’ wages to ensure I comply with the law?
No. While you may be able to decrease the salary of an at-will employee for another reason, the law expressly prohibits decreasing the employee’s salary to comply with the Equal Pay Act.
- I’m a public contractor. Are there any special requirements that apply to me?
Yes. The Equal Pay Act requires certain public contractors to provide data regarding wages and hours worked for certain employees based on gender, race, ethnicity, and job category. According to the law, a form will be provided to track and submit that information.
- With so many changes, how do I ensure I am compliant with the law?
This law does not become effective until July 1, 2018, so employers should speak to counsel about how this law impacts them. Employers should also consider engaging in internal audits and assessments to ensure compliance with the Equal Pay Act before it becomes effective. While increased litigation is an inevitable consequence of this new legislation, proper planning can not only assist in compliance but also assist in defending against NJLAD lawsuits.
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