All Employers with NJ Employees
July 1, 2018
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New Jersey recently enacted stronger protections to its equal pay laws. Currently, employers are prohibited from discrimination in method or payment of wages based on sex. Effective July 1, 2018, this protection will soon apply to anyone in a protected class. The Diane B. Allen Equal Pay Act prohibits paying any member of a protected class “at a rate of compensation, including benefits, which is less than the rate paid … to employees who are not members of the protected class for substantially similar work when viewed as a composite of skill, effort and responsibility.”
Protected classes 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.
A different rate of compensation is only justified if there is a seniority or merit system, or the employer demonstrates:
- That the differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class, such as training, education or experience, or the quantity or quality of production;
- That the factor or factors are not based on, and do not perpetuate, a differential in compensation based on sex or any other characteristic of members of a protected class;
- That each of the factors is applied reasonably;
- That one or more of the factors account for the entire wage differential; and
- That the factors are job-related with respect to the position in question and based on a legitimate business necessity. A factor based on business necessity shall not apply if it is demonstrated that there are alternative business practices that would serve the same business purpose without producing the wage differential
Comparison of wage rates is based on all of an employer’s operations or facilities. Further, a violation can occur each time wages, benefits, or other compensation are paid, and violations result in treble damages. Employees can obtain back pay for up to six years.
- Have a pay audit conducted before the law goes into effect to remedy any potential deficiencies.
- Have pay policies and procedures implemented consistent with the new law.
- Have applicable managers trained on setting compensation rates for employees.
- Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.
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