“Historic, sweeping equal pay legislation” passes in New Jersey. Is your business ready?

In late March, I blogged here about how it was only a matter of time before the State of New Jersey would require local employers to provide men and women the same pay and benefits for performing substantially similar work.

Well, mark your calendars for July 1, 2018.

That’s when the Diane B. Allen Equal Pay Act will take effect, after Governor Phil Murphy signed it into law on April 24.

What motivated this new law in NJ?

Check out snippets from a press release from the Office of the Governor:

“From our first day in Trenton, we acted swiftly to support equal pay for women in the workplace and begin closing the gender wage gap,” said Governor Murphy. “Today, we are sending a beacon far and wide to women across the Garden State and in America – the only factors to determine a worker’s wages should be intelligence, experience and capacity to do the job.  Pay equity will help us in building a stronger, fairer New Jersey.”

In New Jersey, the median salary for women working full-time is just over $50,000, or $11,737 less than the median annual salary for a man. Across all races, women working full-time, on average, earn 82 cents for every dollar earned by a male doing similar work.  African-American women earn about 60 cents for every dollar earned by a white male while a Latina earns only 43 cents. Overall, the economic cost of this disparity totals an estimated $32.5 billion a year in lost wages and economic power.  

According to the National Women’s Law Center, a 20-year old woman beginning a full-time year-round position may lose $418,800 over a 40-year career in comparison to her male colleague. When that male colleague retires at age 60 after 40 years of work, the woman would have to work 10 more years – until age 70, to close this lifetime wage gap.

The strongest equal pay law in America.

There are reports that the Diane B. Allen Equal Pay Act is the strongest equal pay law in America. As I noted before, highlights of this law include:

  • The statute of limitations on a claim is six years, and it restarts with each paycheck.
  • Forget about requiring employees or prospective employees to consent to a shortened statute of limitations or to waive any of the protections provided by the “Law Against Discrimination.”
  • The definition of retaliation under the LAD include a broader definition of what constitutes protected activity. That now includes “[seeking] legal advice regarding rights under this act, shar[ing] relevant information with legal counsel, [or] shar[ing] information with a governmental entity.”
  • And, if you violate the equal pay provisions, “the judge shall award three times any monetary damages to the person or persons aggrieved by the violation.”

The first and fourth bullets led former Governor Chris Christie to conditionally veto the bill a few years ago.

How does the new NJ law differ from the Equal Pay Act?

Many have asked me how this law differs from the Equal Pay Act of 1963, which is federal law.

The short answer is that an employer’s pay practices pass muster under the EPA if it can demonstrate that men and women are paid differently for the same work pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.

Under this new NJ law, the fourth factor is much narrower. It’s not any factor other than sex. Instead, the distinction is limited to differences in “training, education or experience.” The burden is on the employer to establish these distinctions.

How can I help you?

I’m currently working on some modules and other prophylactic measures to help NJ employers prepare for the change in the law, and I may partner with some local HR consultants to assist local businesses further. This will include policies, audits, and HR/manager training.

If you’d like more information about how your business can prepare for this sweeping change, please email me.

“Doing What’s Right – Not Just What’s Legal”