Is Your Business Complying with New Pay Equity Laws?
The equal pay movement has gained traction during the past few years, and New York and New Jersey are leading the charge. Both states have recently passed progressive legislation that expands on federal laws
concerning men and women in the same workplace being given equal pay for equal work. For employers large and small, this means it is essential to keep current with changing requirements in order to be compliant.
On July 1, 2019, the sweeping pay equity legislation known as the Diane B. Allen Equal Pay Act went into effect in New Jersey. The act amended the state's Law Against Discrimination (LAD) by making it unlawful for private employers and the State of New Jersey to pay men and women different rates for "substantially similar" work.
New Jersey’s law extends well beyond the federal Equal Pay Act (EPA), providing pay equality protections, not only based on sex, but to all 17 protected classes recognized under LAD, including race, age, religion, national origin, marital status, pregnancy, and more. Essentially, New Jersey employers must pay all employees performing substantially similar work equally or be prepared to explain the pay differential based upon legitimate business factors.
Also in July 2019, New Jersey Assembly Bill 1094 became law, amending existing legislation to prohibit private employers and the State of New Jersey from screening applicants based on salary history. Effective January 26, 2020, it also bans employers from requiring an applicant’s salary history to satisfy any minimum or maximum criteria and from considering an applicant’s refusal to volunteer salary history in any employment decisions. The law is designed to ensure that employees in the state receive salaries that are commensurate with their skills, qualifications and experience.
New York State passed two key laws in 2019 to help close the gender wage gap. The first modified the state’s equal pay law and the second will ban employers from seeking salary history from applicants or current employees.
The New York law governing equal pay for “substantially similar work” went into effect last October. It applies to all private employers in New York, prohibiting them from paying employees with status within one or more protected classes less than an employee without status within the same protected class or classes for equal work or “substantially similar work,” and performed under similar working conditions.
The second law, which went into effect January 6, forbids all New York State employers – including New York State public employers – from asking for, or relying on, salary history to set pay rates. New York joins many other states and jurisdictions with a salary history ban that applies to applicants for employment, and goes a step further by including current employees.
Employers can confirm wage or salary history of a prospective employee only at the time an offer with compensation is made, and an applicant responds providing salary history information to support negotiation of a wage or salary higher than the initial offer. The law does not prevent an applicant or current employee from voluntarily, and without prompting, disclosing or verifying wage or salary history
Given the ever-increasing focus on equal pay in New York and New Jersey, employers must keep abreast of ongoing changes and evaluate how new legislation will impact their hiring practices. Some companies are taking a proactive approach and conducting compensation audits to identify and remedy pay disparities. Pay equity studies involve gathering and analyzing relevant data for employees doing comparable work, identifying pay gaps, assessing whether there are lawful justifications for such gaps, and taking corrective action. An audit is a valuable step to understanding pay practices within an organization and ensuring compliance. None of these new laws apply to employees of the federal government, however.
If you are an employer who is concerned about complying with the new laws or is seeking legal advice regarding wage discrimination, we are here to help. Contact us at 973-509-8500 x213 or email us at LFarber@LFarberLaw.com.
The contents of this writing are intended for general information purposes only and should not be construed as legal advice or opinion in any specific facts or circumstances.