New Jersey Legislature Considers Bill Mandating Wage Transparency
Jan 31, 2024 | Written by: | Share
Within the workplace landscape, discrimination can manifest in various subtle ways, often concealed within a company's financial records. Pay disparities rooted in factors such as gender or race continue to persist in workplaces, prompting the need for legal frameworks like the federal Equal Pay Act (EPA) to combat gender-based wage gaps. Anti-discrimination laws play a crucial role in addressing pay disparities tied to other factors. However, some employers adopt practices that hinder efforts to tackle wage gaps, such as omitting pay information from job listings.
Advocates for fair pay face challenges in identifying and rectifying wage gaps due to this lack of transparency. Pay transparency laws aim to address this issue by mandating the disclosure of wage rates. Presently, New Jersey employment law lacks explicit provisions on pay transparency, but a pending bill in the state legislature could bring about significant changes.
It's crucial to acknowledge that many wage gaps are not deliberate decisions by current managers, but rather remnants of a historical discrimination era when employers consciously chose to discriminate. For instance, gender stereotypes have perpetuated the practice of paying women less than men for equivalent work, creating an enduring imbalance. Similarly, race-based wage gaps disproportionately affect women of color.
Existing legislation, such as the EPA and the New Jersey Law Against Discrimination (NJLAD), already prohibits pay discrimination based on factors like sex. The NJLAD, going further, extends protection to all protected categories, including race, color, and national origin. It also safeguards employees against retaliation for discussing their pay with colleagues. While the NJLAD protects employees who discuss wages, the burden often falls on them to gather wage information individually. Pay transparency laws aim to shift some of this responsibility to employers, who naturally possess most of this pertinent information.
In 2022, Jersey City took a proactive step, enacting a law requiring employers with at least five employees to disclose salary or wage ranges in job postings. A similar law exists in New York City. The pending bill in the New Jersey Legislature, known as A3937, aligns with these principals and seeks to implement comparable requirements statewide. As presently outlined, A3937 would be applicable to New Jersey-based employers with a workforce of at least ten individuals. The bill mandates that employers incorporate details such as wage or salary ranges, benefits, and additional compensation in all job and promotion postings.
Non-compliance with these requirements could expose employers to civil penalties under the bill. As the bill awaits a hearing in the Assembly Appropriations Committee, its potential impact on fostering pay transparency and combating wage disparities remains a focal point of legislative discussion.
Should you have any questions regarding this pending bill, please reach out to one of our attorneys in the Employment Law Group.
Sharon M. Flynn, Esq. is a partner with Gebhardt & Kiefer, P.C., and practices primarily in the areas of general litigation, employment law, and insurance defense.
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Any statements made herein are solely for informational purposes only and should not be relied upon or construed as legal advice.