New Jersey will soon be one of the first states to have an equal pay law that extends beyond gender to all classes of employees that are protected under the state’s antidiscrimination law. Governor Murphy is about to sign the Diane B. Allen Equal Pay Act, which makes it unlawful for an employer to compensate employees of a protected class less than employees that are not in that class for “substantially similar” work in terms of skill, effort, and responsibility. It will also be a violation of the law for an employer to retaliate against an employee for requesting, discussing with, or disclosing to another employee or his/her lawyer or any government agency, information related to employee compensation. Also, the law prohibits a NJ employer from requiring an employee, as a condition of employment, to sign a waiver or to agree not to make these types of requests or disclosures. The law applies to both public and private employers in NJ.

Q: If a NJ employer conducts an internal audit and finds violations of the NJ Equal Pay Act, can the employer decrease the compensation of certain employees to the compensation of other employees so that they are paid equally?

A: The Equal Pay Act prohibits an employer from reducing the rate of compensation of any employee to comply with the new law. This means that an employer who is in violation of the law cannot decrease the compensation of any employee to the compensation of another employee who is being discriminated against in their compensation.

As we get closer to the date the Equal Pay Act takes effect, July 1, 2018, employers should identify any problematic pay disparities and, if found, take steps to remedy any differences that could be attributed to membership in a protected class.

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