On March 27, 2018, the New Jersey Legislature passed the Diane B. Allen Equal Pay Act, named after a recently retired state legislator who championed pay equity and women’s rights. This amends the New Jersey Law Against Discrimination (“LAD”), to strengthen protections against employment discrimination and promote equal pay for women. Governor Phil Murphy, who campaigned vigorously on a platform of women’s rights and equal pay for equal work leading into last year’s election, has indicated he will sign the legislation when it is presented to him, giving New Jersey one of the nation’s most comprehensive equal pay initiatives. The Act takes effect on July 1, 2018.
This act prohibits employers from paying an employee who is a member of a protected class at a lower rate than employees who are not members of a protected class for substantially similar work. An employer may pay an employee at a different rate only if the employer can demonstrate that the difference in pay is based on a bona fide business reason, such as a seniority or merit system. The act applies to all employers in New Jersey regardless of size.
Until the act takes effect, employers are encouraged to review their employee handbooks as well as hiring and compensation practices to insure pay equity for employees who perform substantially similar work.