On April 24, 2018, Governor Phil Murphy signed New Jersey’s equal pay legislation into law. The legislation, known as the Diane B. Allen Equal Pay Act, amends the New Jersey Law Against Discrimination and expands the categories of individuals who are protected from pay discrimination and imposes stringent requirements and penalties against employers who are found to violate the law.

The New Jersey law is notable and different from laws enacted recently by other states because it prohibits unlawful discrimination in pay or benefits on the basis of membership in any protected class, including those based on race, creed, color, national origin, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces. It also requires that employees receive equal compensation for “substantially similar” work – supplementing in New Jersey the federal requirement that employees be paid the same for “equal work.” Other key provisions include the following:

  • Employers may not prohibit employees from discussing their pay with others or retaliate against those who do so.
  • Claimants are entitled to treble damages upon a jury finding of discriminatory compensation.
  • Back pay awards may look back six years.

The law takes effect on July 1, 2018. With the implementation of this law, New Jersey joins at least seventeen states – including New York, California, and Pennsylvania – and many localities that have recently amended equal pay laws to make them more employee-friendly. This latest development further underscores the need for employers to conduct a privileged, holistic review of their compensation systems, including privileged analyses of compensation, to ensure compliance with the laws of the jurisdictions in which they operate.