New Jersey Pay Transparency Law Is the Stroke of a Pen (and Seven Months) Away From Becoming Law

Quick Hits

• It is anticipated that Governor Phil Murphy will soon sign into law legislation requiring certain employers to disclose compensation and benefits in job postings and provide notice of promotion opportunities.
• Noncompliance with the act may result in civil penalties of $300 for a first violation and $600 for subsequent violations.
• S2310 will “take effect on the first day of the seventh month next following the date of enactment.”

Covered Employers

S2310 applies only to those employers that have “10 or more employees over 20 calendar weeks” and “do[] business, employ[] persons, or take[] applications for employment” in New Jersey.

Temporary help service firms and consulting firms are also covered under S2310 and are similarly required to provide to an applicant for temporary employment the same “pay and benefit information” required of other types of employers at the time of interview or hire for a specific job opening. However, such firms are not required to provide this information “on job postings that are posted for the purpose of identifying qualified applicants for potential future job openings and not for existing job openings.”

Disclosure of Pay and Benefits Information

S2310 requires employers to disclose in each “posting for new jobs and transfer opportunities that are advertised by the employer either externally or internally the hourly wage or salary, or a range of the hourly wage or salary” along with a “general description of benefits and other compensation programs for which the employee would be eligible.” S2310 does not, however, prohibit an employer from “increasing the wages, benefits, and compensation identified in the job opening posting at the time of making an offer for employment to an applicant.”

Notice Requirements

With respect to promotion opportunities, S2310 requires employers to make “reasonable efforts” to “announce, post, or otherwise make known” any promotion opportunity advertised either internally within the employer or externally “to all current employees in the affected department or departments of the employer’s business.” S2310 defines the term “promotion” as a “change in job title and an increase in compensation.”

Notably, however, any promotion for a current employer that is “awarded on the basis of years of experience or performance” would not be subject to this notice requirement. The proposed law also carves out promotion decisions made on an “emergent basis due to an unforeseen event,” but unfortunately does not define these terms nor identify the circumstances under which this exception would apply.

Effective Date

S2310 provides that it will take effect exactly seven months after being signed into law. It is anticipated that Governor Murphy will soon sign the bill, especially as there is a growing trend across the country in favor of pay transparency. Employers that have not yet already begun assigning estimated pay ranges and benefits information for available positions may want to begin doing so soon.

Noncompliance Penalties

Employers that violate the proposed law’s requirements will be subject to civil penalties payable to the commissioner of labor and workforce development in amounts not to exceed $300 for a first violation and not to exceed $600 for each subsequent violation. Notably, while each violation of the law will be considered a “separate violation,” S2310 makes clear that employers will be fined only once for each promotion, job listing, or transfer opportunity that fails to comply with the requirements, even if that promotion, job listing, or transfer opportunity is listed or posted on multiple forums.

Importantly, S2310 does not provide for a private right of action for individuals who claim to be aggrieved by an employer’s failure to comply with the proposed law.

Conclusion

Businesses with employees in New Jersey may want to pay particular attention to each of their job postings to ensure that sufficient information is being provided about anticipated compensation and benefits available for each advertised position.

Ogletree Deakins’ Morristown office will continue monitoring developments with respect to S2310 and its impact on the workplace and will provide updates on the New Jersey and Pay Equity blogs as additional information becomes available.

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