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.