Equal Pay Legislation Signed into Law

Weinberg, Sweeney, Cunningham Bill Closes Wage Gap

TRENTON – Legislation sponsored by Senate Majority Leader Loretta Weinberg, Senate President Steve Sweeney and Senator Sandra Bolden Cunningham to close the wage gap between men and women in New Jersey was signed into law by Governor Murphy today.

“One of the most important aspects of equality for women is centered on the workplace, professional opportunities and equal pay,” said Senator Weinberg (D-Bergen). “This law will help close the wage gap in our state so that women who are working hard to support themselves and their families get the pay they deserve. I am not only gratified that this legislation is finally becoming law, but that it is named in honor of my former colleague across the aisle, Senator Diane Allen, who worked tirelessly to see this day arrive.”

The law is named the “Diane B. Allen Equal Pay Act” in honor of former Republican Senator Diane Allen, who worked on the legislation and other issues important to women before retiring from her Senate seat.

“Here we are in 2018 and the undeniable truth is women continue to be paid less than men for comparable work,” said Senator Sweeney (D-Gloucester/Cumberland/Salem). “Economic equality is not just the right thing to do – the fair thing to do – it is good for the economy. Equal pay will raise wages for women, helping families to get ahead, and it will benefit the entire state by strengthening the economy. On April 10, we marked Equal Pay Day, the date this year when a woman earned what a man earned at the end of 2017. We need to eliminate that gap. This takes us closer to that goal.”

The Diane B. Allen Equal Pay Act makes changes to existing law to combat pay discrimination by creating greater transparency and greater protections for employees. It would prohibit unequal pay for “substantially similar” work, and require an employer to demonstrate a different rate of compensation is the result of specific factors, such as training and education.

“This is one of the most important actions we have taken because it will have a real impact on people’s lives in a very positive way,” said Senator Cunningham (D-Hudson).  “The Diane B. Allen Equal Pay Act brings transparency to wages to help address this problem. With measures like this, we are ending the culture of inequality that still exists in the workplace. Our goal must be to ensure that workers are treated equally, no matter their gender, race, ethnicity, religion or background. Today, New Jersey moves closer to fulfilling that promise.”

This new law codifies the State Supreme Court’s interpretation of wage discrimination under the New Jersey Law Against Discrimination by restarting the statute of limitations each time a paycheck is issued. It also allows back pay for six years, a provision that is stronger than the federal law’s two-year cap. No other state has a time period longer than six years.

And, the law expands equal pay protections from only sex-based discrimination to the characteristics of all classes covered by the Law Against Discrimination.

Women in the United States make roughly only 79 cents for every dollar a man makes, essentially unchanged since 2001. The wage gap is much greater for women of color: African-American women make 58.1 cents for every dollar a man does; for Latinas, the wage statistic is 42.7 cents.

Between 1980 and 2000, women’s earnings grew while men’s wages remained unchanged, helping to narrow the gap in pay between men and women. However, progress has slowed, and in every state in the nation, women on average still earn less than men, according to research from the Institute for Women’s Policy Research.

Specifically, the law:

• Prohibits unequal pay for “substantially similar” work, under the Law Against Discrimination (LAD). It is unlawful for an employer to pay a rate of compensation, including benefits, to an employee of one sex less than the rate paid to an employee of the other sex for substantially similar work when viewed as a composite of skill, effort and responsibility, unless specific conditions apply.

• Requires different rate of compensation be justified by factors other than sex. The law permits an employer to pay a different rate of compensation if the employer demonstrates that the differential is made pursuant to a seniority system, a merit system, or is based on legitimate, bona fide factors other than sex, such as training, education, experience, or the quantity or quality of production. It requires that each factor is applied reasonably, that one or more of the factors account for the entire wage differential, and that the factor or factors do not perpetuate a sex-based differential in compensation, are job-related and based upon legitimate business necessities. Comparison of wage rates would be based on those in all of an employer’s operations or facilities.

• Restarts statute of limitations for each instance of discrimination.  The law provides that a discriminatory compensation decision or other employment practice that is unlawful under the LAD occurs each time that compensation is paid in furtherance of that discriminatory decision or practice – effectively making each paycheck another instance of discrimination, reflecting the State Supreme Court’s interpretation of wage discrimination under the LAD as well as language in the federal Lilly Ledbetter Fair Pay Act. In addition, the lawl provides that liability shall accrue and an aggrieved person may obtain relief for back pay for six years, a provision that is stronger than the federal Lilly Ledbetter Act, which has a two-year cap on back pay.

• Prohibits employer retaliation against employee for disclosing/discussing compensation. Employers cannot take reprisals against an employee for requesting, disclosing or discussing information about the job title, occupational category, and rate of compensation of any employees or former employees, as well as other information. It prohibits an employer from requiring an employee or prospective employee to forego rights to make, discuss, or request those disclosures.

• Requires transparency in state contracting. The law requires public contractors to provide general information about their workers’ demographics and pay and the law requires disclosure to employees and their authorized representatives upon request.