Facts About The Diane B. Allen Equal Pay Act

On April 24, 2018 Governor Phil Murphy signed the Diane B. Allen Equal Pay Act (the “Act”) which is an amendment to the New Jersey Law Against Discrimination (the “LAD”). The Act now requires pay equality, including benefits, across all protected categories under the LAD. To assist your workplace in navigating the provisions of the Act, please review the following:

When does the Act go into effect?

  • July 1, 2018

What is prohibited under the Act?

  • The Act prohibits pay differentials (including benefits) between members of any “protected class” performing “substantially similar work” when viewed as a composite of skill, effort, and responsibility.
  • Employers cannot decrease the salary of an employee to ensure compliance with the Act.
  • Employers cannot ask their employees to waive their rights under the Act.
  • The Act contains a provision related to protecting employees in discussing, seeking, or obtaining information regarding their compensation and the compensation of other employees.

What is a “protected class?”

  • It includes any category specifically noted under the New Jersey Law Against Discrimination (LAD) such as race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, and liability for service in the Armed Forces of the United States.

When does an employer not violate the Act?

  • An employer’s workplace compensation practices do not violate the Act if the employer can show that employees are paid differently for the same work pursuant to: (1) a seniority system; (2) a merit system; or (3) the employer demonstrates:
  • That the differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class,  such as training, education or experience, or the quantity or quality of production;
  • That the factor or factors are not based on, and do not perpetuate, a differential in compensation based on sex or any other characteristic of members of a protected class;
  • That each of the factors is applied reasonably;
  • That one or more of the factors account for the entire wage differential; and
  • That the factors are job-related with respect to the position in question and based on a legitimate business necessity.

How can employees determine their comparators under the Act?

  • Employees are not limited to their own facility or location to compare wage rates. The Act provides that wage comparisons will be based on wage rates in all of the employer’s operations or facilities.

What about employers contracting with a public entity?

  • Employers that contract with the State or other public bodies will be required to provide a report to the Department of Labor and Workforce Development (the “DOLWD”) showing compensation hours and hours worked by employee categorized by gender, race, ethnicity, job category, and total compensation. The DOLWD will prepare the form for this information.

What if the employer violates the Act?

  • If sued and an employer is found to be in violation of the Act, a court shall award three times any monetary damages to the aggrieved employee, plus attorneys’ fees and court costs.

What Employers should do now? (Recommendations)

  • Review items such as your workplace’s employee compensation packages, pay ranges, job descriptions, and other related items to ensure there is no inequity in any of your workplace’s financial terms or conditions pursuant to the Act.
  • Update applicable workplace manuals, handbooks, policies, rules, and regulations to ensure compliance with the Act.
  • Train and educate those on your management team regarding the provisions of the Act including its retaliation provisions which makes it unlawful to discipline an employee that complains about compensation disparity in your workplace.

Should you have further questions on how the Diane B. Allen Equal Pay Act will affect your workplace, please contact the Attorneys at Brown & Connery, LLP at 856-854-8900 and we will be happy to assist you.