Murphy signs equal pay law, aiming to close wage gap

Making good on a tweet he delivered nearly two weeks ago, on Equal Pay Day, Gov. Phil Murphy signed into law Tuesday the Diane B. Allen Equal Pay Act, strengthening protections against employment and compensation discrimination for members of a protected class, including, but not limited to, gender.

“From our first day in Trenton, we acted swiftly to support equal pay for women in the workplace and begin closing the gender wage gap,” Murphy said in a statement. “Today, we are sending a beacon far and wide to women across the Garden State and in America — the only factors to determine a worker’s wages should be intelligence, experience and capacity to do the job. Pay equity will help us in building a stronger, fairer New Jersey.”

The new equal pay legislation is known to the be most sweeping of its kind in America to close the gender wage gap.

Sponsored by Senate Majority Leader Loretta Weinberg (D-Teaneck), the Diane B. Allen Equal Pay Act makes it unlawful for an employer to pay any employee who is a member of a protected class — including gender, race, national origin, age, marital or domestic partnership status, parental status, sexual orientation, gender identity or expression, and disability — less than the rate paid to other employees for “substantially similar work when viewed as a composite of skill, effort and responsibility.”

Employers, rather than employees, are now responsible for reporting and demonstrating how pay discrepancies are solely due to legitimate and necessary business factors such as training, experience, or quantity or quality of production.

Especially in this era of #MeToo, #TimesUp and increased media and celebrity attention on gender and minority wage gaps, the Diane B. Allen Equal Pay Act builds and strengthens upon a number of federal and state laws.

For example, affected employees can now seek back pay for a six-year period, whereas, previously, it was two years.

Furthermore, a judge or jury can demand that employers found guilty of violations — including retaliating against employees who have discussed or disclosed pay rates or employment practices to others, regardless of whether a waiver was signed against doing so — pay treble damages.

“New Jersey has long had the Law Against Discrimination, which always has prohibited paying women less than men for the same job,” Anthony M. Rainone, partner in the Labor and Employment Group at Brach Eichler in Roseland, said. “But what this (law) does is add teeth — very sharp teeth — to the law by expanding the damages that are available to an aggrieved employee of any protected class.”

The Diane B. Allen Equal Pay Act also integrates and expands upon two of the most cited federal laws when it comes to wage and employment discrimination.

According to the U.S. Equal Employment Opportunity Commission, the Equal Pay Act maintains that men and women be given equal pay for equal work in the same establishment. For example, “two bookkeeping jobs could be considered equal, even if one of the job holders has a master’s degree in physics, since that degree would not be required for the job.”

Additionally, the Lilly Ledbetter Fair Pay Restoration Act of 2009 overturned a Supreme Court decision to restrict the time period for filing complaints of employment discrimination concerning compensation, maintaining that each paycheck that contains discriminatory compensation is a separate violation, regardless of when the discrimination began.

Ledbetter was at the bill signing ceremony.

These laws, according to Nancy Erika Smith, partner and co-founder of Smith Mullin in Montclair, have not made much of a dent in pay disparity.

“If women are paid less for 20 years, their pension is less, their 401(k) is less, they will never recoup the vacations they couldn’t take, the summer camp they couldn’t send their kids to, the new car they couldn’t afford, the education they couldn’t afford for themselves or their kids, the financial help they couldn’t give to their parents or children — the list goes on,” she said. “Now that reporting of wages is required, this may even educate some employers who are paying women and minorities less.”

According to the National Partnership for Women and Families, full-time female employees in New Jersey are typically paid just 81 cents for every dollar paid to a man, resulting in a yearly pay difference of $11,737. Furthermore, black women in New Jersey make just 57 cents on the dollar and Latina women just 42 cents on the dollar in comparison with white men.

Still, some saw the new law goes too far.

“While I’m all for equal pay for women and minorities for ‘substantially similar work,’ the New Jersey Equal Pay Act already protects women from pay disparity and the New Jersey Law Against Discrimination protects minorities from discriminatory pay practices,” Steve Adler, co-chair of Mandelbaum Salsburg’s Labor and Employment Law Practice Group in Roseland, said. “(This new law) extends the statute of limitations to six years, even though other types of invidious discrimination have a two-year limitations period, and exposes employers to claims going back even further than six years, because it adopts the continuous violation doctrine and the discovery rule.

“This new law will invigorate plaintiffs’ lawyers to bring more cases, since there is a possible pot of gold at the end of the rainbow based upon the broader timeframe a claim may cover, plus the possibility of treble damages and counsel fees.”

Smith said the laws cited have not been carefully enforced.

“Mainly because women are unware of the pay disparity,” she said. “But just getting the differential for two years’ worth of unequal pay is not worth it.”

Michellene Davis, president of Executive Women of New Jersey and an executive with RWJBarnabas Health, said ensuring that women receive equal pay for equal work should not be controversial, nor should it be negotiable.

“Wage discrimination not only negatively impacts women and people of color, it also harms the economic progress of our state,” she said. “Data shows that, if New Jersey women received equal pay for equal work, the poverty rate for working women in the state would drop by half and the economy would grow by $16.6 billion, according to the Institute for Women’s Policy Research.

“We salute Gov. Phil Murphy, Lt. Gov. Sheila Oliver, Sen. Loretta Weinberg, the New Jersey State Legislature, and all the organizations and leaders involved in the work to ensure that women and all New Jerseyans are paid what they deserve.”

The legislation will go into effect July 1.

The New Jersey Senate also has advanced S559, a bill barring public and private employers from asking job applicants about their salary histories, that Murphy also is expected to sign into law if it passes. In fact, as his first official act as governor, Murphy signed a similar executive order for state agencies.

“This will upend common employer pay practices,” Charles A. Sullivan, professor of law and senior associate dean for faculty and finance at Seton Hall Law School in Newark, said. “For example, it’s fairly common for employers to hire someone at a meaningful but small increase over prior salary. In a world where women are generally paid less than men, that means there’s a tendency to perpetuate prior discrepancies. This new law would change that.”

The most obvious thing for businesses to do, then, he said, would be to set a compensation structure before a job search begins and not inquire into the salaries of the candidates.

“This might result in more offers being turned down if the salary is too low, but it would limit liability,” Sullivan said.

Rainone agreed that New Jersey businesses should be preparing for the upcoming legislation.

“New Jersey businesses should be reviewing their pay practices and pay amounts and evaluating whether there is a legal justification for any pay differentials between employees based upon their protected class, not just gender,” he said.

Smith said the strengthened amendments under the new law is exactly what the New Jersey business climate has needed to address such wage and employment discrepancies.

“If you have no moral obligation to address (this issue), now the law will encourage you to do so,” she said.