The passing of the New Jersey Pay Equity Law (or Equal Pay Act) is causing quite a stir among NJ employers who are struggling to make sense of the law’s ambiguous language.
The media is fueling the unease with articles directed at employees, outlining the steps they can take to determine whether their employer has violated the law.
Lisa Salcido, Director of Balance Point’s human resources consulting service BPHR, warns employers to be vigilant and take action now, “NJ businesses are at greater risk than ever for discrimination complaints. The law’s pro-employee stance, aggressive penalties and lack of clarity or direction poses many challenges for employers. Now is the time to strategize how to protect your organization.”
You likely have a lot of questions, and we’re here to help. Lisa shares these answers to questions she’s recently been flooded with from clients.
Q. When does this begin and does it apply to my business?
Starting July 1, 2018, all New Jersey public and private employers must pay the same wage, and offer the same benefits, for “substantially similar work” to all protected classes.
There is no small business exception, making it broader than many other state and federal laws.
Q. Can we lower salaries to make them comparable or pay a one-time penalty?
Employers may not reduce the salaries of better paid workers to comply.
Penalties for inequality violations include:
- Repayment of up to six years of back pay.
- Damages of up to three times the amount a claimant was denied in compensation.
- Each paycheck that contains an unequal pay rate counts as a separate act of discrimination, restarting the statute of limitations.
Don’t take risks. This law offers fertile ground for litigation and the burden of proof will be on the employer to prove that they have not violated the law.
Q. How will my employees know if I pay one more than another?
The new law provides greater protections to employees that discuss how much they earn with their peers, without fear of retaliation.
Q. What action should employers take?
Determining whether pay equality exists across all protected classes will impose a significant burden on New Jersey employers. Consider the time and resources to audit your compensation structure.
From setting uniform pay scales, documenting compensation decisions, determining pay discrepancies, updating handbook discrimination policies, reviewing justifications such as merit-based performance reviews and job descriptions…there’s a lot you need to do to protect your organization.
NJ Pay Equity Law Protects Employees, Balance Point Protects Employers
Balance Point offers a full-suite of solutions to help you navigate this extensive law.
BPHR, Balance Point’s high-touch HR consulting service provides access to compensation and compliance experts. An HR Generalist will fully integrate within your organization to help audit pay policies, identify discrepancies, and guide you through your options to ensure adherence to the law.
Our cloud-based human capital management (HCM) system analyzes position data with diversity metrics to flag pay disparities. Unequal pay instances are identified and the total financial impact of proposed adjustments can be measured. Pay differences can be resolved across payroll and HR and justification for lawful pay imbalances can be documented easily. The system will track pay data over time providing long-term protection.
Schedule a consultation with one of our Human Capital Management experts to learn more.