The New Jersey Division of Civil Rights’ Equal Pay Act Enforcement Guidance

As this blog previously informed, back on April 24, 2018, New Jersey Governor Phil Murphy signed into law the Diane B. Allen Equal Pay Act (the EPA). The EPA prohibits an employer from paying an employee who is deemed a member of a class protected under New Jersey’s Law Against Discrimination (the LAD) less than what it pays an employee who is not a member of that LAD-protected class who performs  substantially similar work. Protected class characteristics under the EPA remain the same as they are  under the LAD, that is, it is against the law to treat someone hostilely, unfairly or differently because of their, “race, creed, color, national origin, ancestry, age, marital status, affectional or sexual orientation, etc.” N.J.S.A., 10:5-12(a). This article will discuss the official enforcement guidance recently issued by the New Jersey Division of Civil Rights addressing the nature and scope of the EPA.

The EPA expands the remedies available to a victim of pay discrimination. Prior to the passage of the EPA, the LAD already prohibited employers from discriminating “in compensation or in terms, conditions or privileges of employment” based on many protected characteristics. Historically under the LAD, a person protected under the LAD could recover up to two years of back pay for a successful pay discrimination case. Now under the EPA, an employee who establishes pay discrimination can recover up to six years of back pay if the discrimination was continuous, and the most recent violation occurred within the LAD’s two-year statute of limitations. The EPA also makes clear that a violation of the LAD occurs each time an employee is “affected by application of a discriminatory compensation decision or other practice,” including each time an employee receives a paycheck. N.J.S.A. ,10:5-12(a).

The EPA requires equal pay for substantially similar work.  The EPA prohibits an employer from paying any employee “who is a member of a protected class at a rate of compensation, including benefits, which is less than the rate paid by the employer to employees who are not members of the protected class for substantially similar work, when viewed as a composite of skill, effort and responsibility.” N.J.S.A., 10:5-12(t). The EPA specifies that “[c]omparisons of wage rates shall be based on wage rates in all of an employer’s operations or facilities.” Id. It also prevents employers from reducing anyone’s compensation to cure a violation of the Equal Pay Act. Id.

If a member of a protected class demonstrates that they are compensated less for substantially similar work than a person who is not a member of that protected class, the employer is liable under the Equal Pay Act unless it can demonstrate either:

  1. That the pay differential is made pursuant to a seniority system or a merit system; or
  2. That all five of the following are true:
    1. “That the [pay] differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class, such as training, education or experience, or the quantity or quality of production;
  3. That the factor or factors are not based on, and do not perpetuate, a differential in compensation based on sex or any other characteristic of members of a protected class;
  4. That each of the factors is applied reasonably;
  5. That one or more of the factors account for the entire wage differential; and
  6. That the factors are job-related with respect to the position in question and based on a legitimate business necessity. A factor based on business necessity shall not apply if it is demonstrated that there are alternative business practices that would serve the same business purpose without producing the wage ”

N.J.S.A., 10:5-12(t).

The EPA prohibits retaliation. The EPA expands anti-retaliation protections previously found in the LAD by further prohibiting retaliation against anyone who seeks “legal advice regarding rights” under the LAD, “share[s] relevant information with legal counsel,” or “shares information with a governmental entity.” N.J.S.A., 10:5-12(d). That applies to any rights under the LAD, not simply claims for equal pay.

The EPA expands remedies available to a victim of pay discrimination.  In addition to those existing remedies under the LAD (economic and emotional distress damages, punitive damages and an award of attorney fees), the EPA allows for treble damages (three times any monetary damages) for proven unequal pay violations and for violations of the anti-retaliation prohibitions found in N.J.S.A.,10:5-12(t) and 12(r), respectively.

Should you believe you are the victim of pay discrimination, call the attorneys at Mashel Law for immediate help (732) 536-6161 or fill out the contact form on this page. The attorneys at Mashel Law, located in Marlboro, New Jersey, are dedicated to protecting the rights of employees.