New Jersey’s Equal Pay Bill Could Increase Liability for Employers

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[co-author: Nicole Zolla]

On Feb 11, 2016, the Nj Senate passed a brand new bill (S992) (the “Bill”) in order to undo the frequently-discussed gender pay gap. The Balance would enhance unequal pay claims underneath the Nj Law Against Discrimination (the “LAD”) and extend the time limit for individuals claims. The election was 28-to-4 within the Senate despite strong opposition from many Nj business groups. The balance was received within the Nj Set up on Feb 16, and immediately known the Set up Labor Committee. Last Thursday, March 3, the balance was used in the Set up Condition and native Government Committee.

If enacted, the balance would ban unequal purchase jobs which are “substantially similar” in work when it comes to skill, effort, and responsibility. Underneath the Bill, a company could be permitted to pay for different rates of compensation to employees for substantially similar work only when the business can demonstrate a seniority or merit system in position or, within the alternative, each one of the following five (5) factors:

  1. The pay differential is dependant on a number of legitimate, genuine factors apart from sex, for example training, education, or experience, or even the quantity or quality of production
  2. The genuine factors don’t perpetuate a sex-based differential in compensation
  3. Each one of the genuine factors are applied reasonably
  4. A number of the genuine factors account for the whole wage differential and
  5. The genuine factors are job-related with regards to the position under consideration and with different legitimate business necessity.

A company won’t be able to fulfill the 5th factor if there’s another business practice that will serve exactly the same business purpose without producing the wage differential.

Possibly the Bill’s most critical impact, however, is going to be from the impact on the relevant time limit. Much like federal law, every time a differential salary is disseminated for an worker, that act will become qualified as another adverse action. Unlike federal law, however, the balance provides the back pay day extends backward to incorporate the whole, continuous period where a pay differential breach is located – not only the 2-year limitation based in the federal fair pay law.

The Balance would affect both private and public employers, and would impose additional reporting needs on condition contractors. Additionally, it would stop retaliation and adverse action against employees for disclosing certain job information, including their rates of compensation. These potential changes seriously the heels from the EEOC’s lately-announced changes to EEO-1 reports, adding pay ranges towards the reports which might place the EEOC on alert should there be disparities in compensation. (See our prior publish on these new data reporting needs here).

While it might be a while before Nj enacts the balance into law, employers must start to reevaluate the task descriptions and titles of the employees, identifying “substantially similar” jobs with pay differentials which can be problematic when the Bill is enacted. Employers also needs to carefully document all pay-related decisions and variations, noting their legitimate business purposes. We continuously update yourself on the growth of the balance because it makes its way with the Nj Set up.

National employers ought to be conscious that both California and New You are able to have lately enacted similar amendments.

(See our prior posts on individuals amendments by clicking the next links California and New You are able to).

*Nicole Zolla is really a school intern presently attending Brooklyn School.

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