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Diane B. Allen Equal Pay Act broadens NJ’s Law Against Discrimination (LAD)

2018-06-26

Act is considered one of the most comprehensive and pro-employee in the nation

On July 1, 2018, the Diane B. Allen Equal Pay Act goes effect to promote equal pay for all employees covered under the New Jersey’s Law Against Discrimination (LAD).  The Act makes it an unlawful employment practice for an employer to pay any employee who is a member of a protected class less than the rate paid to other employees who are not members of that protected class for “substantially similar work when viewed as a composite of skill, effort, and responsibility.”  It covers any employee who works and/or lives in New Jersey.

The Act expands equal pay on the basis of membership in a protected class which includes race, creed, color, national origin, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy or breastfeeding, sex, gender identify or expression, disability or atypical hereditary cellular or blood trait of any individual or liability for service in the armed forces.

Wage rate comparisons can occur in all of an employer’s operations or facilities and will limit a challenge that comparisons should be more localized.  The Act provides that a violation may occur each time an employee is affected by a discriminatory compensation decision or practice and may arise with each paycheck an employee receives.  The Act also provides for six years of back pay recovery and when a violation or retaliation is proved, the Division of Civil Rights or a court is required to award three times the amount of the underpayment.  

There are five excepts whereby an employer may pay different rates to individuals if they can demonstrate each of the following:

  1. 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;
  2. That the factor or factors are not based on, and do not perpetuate differential in compensation based on sex or any other characteristic of members of a protected class;
  3. That each of the factors is applied reasonably;
  4. That one or more of the factors account for the entire wage differential; and
  5. That the factors are job-related with respect to the position in question and based on a legitimate business necessity.
The foregoing has been prepared for the general information of clients and friends of Workplace Dynamics LLC and is not being represented as being all-inclusive or complete. It has been abridged from legislation, administrative ruling, agency directives, and other information provided by the government. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel.