The Act also requires a covered employer to disclose in each external and internal posting or advertisement for a new job or transfer opportunity the hourly wage or salary, or a range of the hourly wage or salary, and a general description of benefits and other compensation programs for which the employee would be eligible. The law does not prohibit a covered employer from increasing the wages, benefits, and compensation identified in the posting when making an offer for employment to an applicant.

Which employers are covered by the Act?

The NJ Pay Transparency Act broadly defines “employer” as any person, company, corporation, firm, labor organization, or association which has 10 or more employees over 20 calendar weeks and:

1) does business in NJ, or

2) employs persons in NJ, or

3) takes applications for employment within NJ.

The Act does not state that all 10 employees have to work in NJ for an employer to meet the definition. Out of state employers that meet the 10 employee headcount should assume they are required to comply with the Act if: 1) one or more of their employees work in NJ (there is an argument that the law requires more than one such employee); or 2) they do business in NJ (even if they are only seeking out of state applicants), or 3) they or a company on their behalf, collects or accepts job applications for roles in NJ.

The term "employer" also includes the State, any county or municipality, or any instrumentality thereof. The definition of employer also includes job placement, referral agencies and other employment agencies.

Temporary help service firms or consulting firms registered with the Division of Consumer Affairs must provide pay and benefits information to an applicant for temporary employment during the interview or when they are hired for a specific job opening. They are not required to disclose this information in postings meant to identify qualified applicants for potential future job openings.

Can employees or applicants sue covered employers for violations of the Act?

The Pay Transparency Act does not provide for a private right of action. Only the New Jersey Commissioner of Labor and Workforce Development has enforcement authority. That said, an employee could sue for violations of NJ’s Diane B. Allen Equal Pay Act which prohibits employers from paying wages to a member of a protected class at a rate of compensation/benefits that is less than the rate paid to employees who are not members of the protected class for substantially similar work. Under NJ’s Law Against Discrimination (LAD), protected classes include sex, race, creed, color, national origin, ancestry, age, affectional or sexual orientation, pregnancy, gender identity or expression, and disability. An employee might also bring a Conscientious Employee Protection Act (whistleblower) claim if that employee believes the employer retaliated against them for reporting non-compliance with the Pay Transparency Act or violations of the Equal Pay Act and/or LAD.

What are the penalties for violating the Act?

A covered employer who violates the Act shall be subject to a civil penalty in an amount not to exceed $300 for the first violation, and $600 for each subsequent violation. Failure to comply with the Act for a single promotion, job opening or transfer opportunity will be considered one violation, even if that opportunity is posted or listed multiple times through multiple means.

Next steps for covered employers?

• Review compensation, pay ranges and benefits for all positions. Review internal promotion procedures. Take a hard look at your policies for determining wages/salaries and promotions. Identify wage and other disparities that might indicate decisions and patterns based on a protected class. Make needed adjustments. Develop a process to consistently review and update job descriptions, compensation, pay ranges and benefits.
• Review and revise existing job postings and your job advertisement templates (for external and internal postings), for pay ranges, benefits and other compensation. Contact recruiters and other outside service providers handling the advertising of positions to ensure compliance with the Act.
• Train appropriate personnel on pay equity and Pay Transparency Act compliance.

Pay disparities cause low morale, the loss of good employees and lawsuits by employees who believe they are being paid less because of their gender, race or some other protected class. We can help you avoid these costly problems and create a more positive, productive workplace. Working with an attorney on each of the above steps means much of the process will be covered by the attorney-client privilege.

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