With the Pay Transparency Act (the “Act”) becoming law after the Governor failed to act, New Jersey joins several states that will require certain employers to post compensation and benefits information for job openings and transfer opportunities.
Consistent with some other states’ laws, the Act will require employers, when posting new jobs and transfer opportunities – whether internally or externally – to disclose the hourly wage, salary, or range of hourly wage or salary information applicable, as well as a general description of any benefits or other compensation programs.
But New Jersey has expanded on other states’ requirements, requiring employers to make “reasonable efforts” to announce or post promotional opportunities that are otherwise announced either internally or externally to all employees in affected departments before making a promotional decision, except promotions based on years of experience or performance.
The Act also deviates from other states’ laws because of its vast scope, applying to employers that do business or employ individuals in New Jersey and employers that accept applications in New Jersey, so long as the employer has at least ten employees over twenty calendar weeks. It also expressly applies to job placement and referral agencies. Registered temporary help service and consulting firms must also provide compensation and benefit information to candidates interviewed or hired for job openings.
While the Act defines employer – albeit broadly – it does not define what it means to be an employee. Without a statutory definition, it will likely fall to the Department of Labor & Workforce Development (the “Department”), charged with enforcing the Act, to decide who qualifies as an employee. While there are many potential tests for employment status, the Department historically has favored the ABC Test, which tends to capture more individuals than any other test, resulting in more “employees” and more potential violations.
Fortunately for employers, the Act does not take effect until June 1, 2025. This gives employers ample time to consult experienced counsel to ensure compliance. While the Act does not authorize a private right of action, employers who fail to comply with the Act’s requirements may be subject to a civil penalty not to exceed $300 for the first violation and $600 for each subsequent violation from the Department.
As June approaches, employers subject to the Act should take steps to confirm compliance, including advising recruiting and human resources teams of the new requirements. Our attorneys are available to discuss how to navigate these changes as questions about implementing the Act arise.
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