New Jersey Passes Broad Pay Transparency Law
Last week, New Jersey Governor Phil Murphy approved a new pay transparency law (Public Law 2024, c.91).
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This law imposes two new requirements on certain employers. New positions must disclose the expected pay range in the job posting and opportunities for merit-based promotions must be disclosed to all of the employees within that department. The law takes effect June 1, 2025.
Who is affected? This law applies to employers with at least 10 employees over the course of any 20-week period. If an employer meets that size requirement, it must comply with these requirements if it does business in New Jersey, if it employs New Jersey employees or if it “takes applications for employment from within.”
In the age of internet job sites, this law could potentially cover many employers who are otherwise not subject to New Jersey law.
Pay transparency. Under the new law, job postings must include either: 1) the starting wage or a salary; or 2) a range of the wage or salary. The posting must also include a general description of benefits and other compensation programs. This goes further than New York’s pay transparency law enacted last year, which only requires the pay rate or pay range to be disclosed.
Promotion transparency. Employers must also disclose any opportunities for promotion to all employees within the relevant department before they make the ultimate decision to promote an employee. It applies equally to decisions to promote from within the department as well as job opportunities advertised externally that could be filled by an internal promotion. There are certain limited exemptions for promotions based on an emergency situation or on the basis of experience or performance.
Remedies. The law imposes a $300 fine on an employer for the first violation of this law and $600 for any subsequent violation. An employer violates the law whenever it fails to comply with the requirements with respect to a particular position, not with respect to a particular job listing. For example, if an employer lists the same position on multiple job sites without complying with the pay transparency law, it is a single violation. The law does not provide for a private right of action.
What employers should watch for. The New Jersey pay transparency law goes further than similar pay transparency laws in other states. On top of disclosing a pay range for every new job opening, employers must disclose ancillary benefits in that posting and must also post that opportunity internally if it could be filled with a promotion. Employers will need to take steps to be in compliance by June 2025. The attorneys at Klehr Harrison are ready to answer all of your questions about this new law and similar pay transparency laws.
Co-authors Jonathan Krause, Litigation Department co-chair, and Michael Paul Bannon, associate, are members of the labor & employment practice at Klehr Harrison.