The document summarizes New Jersey's Equal Pay Act, which amends the state's Law Against Discrimination. It prohibits paying employees in protected classes, such as women and racial minorities, lower rates of compensation for substantially similar work. The act also protects employees from retaliation for discussing pay rates and bans policies that restrict such discussions. It applies to all New Jersey employers and allows employees to file lawsuits for damages. The document discusses challenges employers may face in complying, including defining key terms, conducting job comparisons, and ensuring performance reviews are bias-free. It advises employers to review compensation practices and policies to address potential violations.

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John J. Sarno, Esq.
N.J. Equal Pay Act

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Diane B. Allen Equal Pay Act
effective July 1, 2018
"This is a wake-up call for employers."
- Governor Phil Murphy
"An owner could lose a business for not complying." -
Assemblywoman Pamela Lampitt
"Employers will need to start paying fairly." –
Senator Loretta Weinberg

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Amends the N.J. Law Against
Discrimination
Creates legal remedies for compensation discrimination or “in
the financial terms and conditions of employment” and prohibits
less pay for “substantially similar work” in relation to a
“member(s) of a protected class.”
Sex/Gender
Pregnancy
Race
Religion
National Origin/Ancestry
Age
Disability/Medical Condition
Sexual Orientation
Gender Identity/Expression
Civil Union Status
Military Status

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Prohibits retaliation against employees who engage
in requests, disclosures or discussions “regarding
job title, occupational category, and rate of
compensation, including benefits” and “gender, race,
ethnicity, military status or national origin of any
employee or former employee.”
 Requests from any employee or former employee
 Discussions with any other employee or former
employee
 Disclosures to any other employee or former employee
 Discussions with, and disclosures to a lawyer or
government agency
 “Opposition” to unlawful discrimination
 Participation in a “proceeding”
 Sharing information with a lawyer or government
agency
 “Aiding” or encouraging employees

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Applies to all employers in New Jersey, regardless of
size.
Option to file a charge to NJ Division on Civil Rights
or to file civil suit - 2-year statute of limitations
 Jury trial
 Back pay for each “period of time” up to 6
years
 Compensatory damages, including
emotional distress
 Punitive damages
 Mandatory treble (triple) damages
 Reimbursement for attorneys’ fees

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 Cannot require employees to shorten statute of
limitations (i.e.: each paycheck constitutes an
occurrence so that the time limit for filing
discrimination begins to run each time employee
receives a paycheck (or pension payment)
 Cannot require employees waive of “any
protection provided by the N.J. Law Against
Discrimination (i.e.: arbitration agreements).
 Cannot not require, as a condition of
employment, a waiver to not make requests or
disclosures
 Cannot require employees to agree not to make
requests or disclosures HR Red Flag
Other Prohibitions

7. Probably not equity
partners.
“Employees” means ALL Employees
“Employee” means any individual who performs
services for and under the control and direction of an
employer for wages or other remuneration.

8. 8

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Should an Employer have a policy
covering employee requests?
Yes
Policy can be located on EANJ Members’ Only Website

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Some Unanswered Questions
What is a “request?”
Verbal?
In writing?
Email?
Formal or informal?
Who can make the request?
An employee?
A group of employees?
A representative, i.e. lawyer?
What is “information regarding” rate of compensation, etc.?
Performance evaluations?
Disciplinary notices?
Incident reports?
Letters of commendation?

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No
Must an Employer Grant the Request of a lawyer
without a subpoena?
No
Can an Employee be Disciplined for making a Request?
No
 Unwarranted transfer
 Blocking promotion
 Unjustified criticism
 Sub-par ratings
Must an Employer Grant the Request?

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No
Can an Employee be disciplined for disclosing,
upon the request of one employee, the wage of
an another employee?
No
Can an Employer direct an employee not
to disclose wages?
Cannot “require” an employee “to
agree not to make the disclosure.”
Can an Employer discipline an employee for
disclosing her own wage to another employee?

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to pay any employee, who is a member of
a protected class, at a rate of
compensation, including benefits, less
than another employee, who is not a
member of the protected class, for
“substantially similar work.”
Unlawful employment practice for
an Employer:

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What is “rate of compensation ?”
Term is undefined.
Courts will look to other laws for guidance
The term “rate compensation" probably
includes any payments made to, or on behalf
of, an employee as remuneration for
employment, i.e.: bonuses, overtime, paid
time off, holiday pay, expense
reimbursements

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What is “Substantially Similar
Work?”
Work requiring similar skills, effort and
responsibility.

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EEOC Compliance Manual
Focus is on primary duties of the work, not incidental
duties.
If the difference in skill or effort is inconsequential or
minor, payment of higher wages to employees of one
sex would be an unlawful wage differential.
Example: Female college teacher alleges that she is
paid less than male counterpart. The male teacher
gives an occasional additional lecture.
EEOC holds that jobs are substantially the same.

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Only skills actually required for the jobs, not the
ability of employees holding those positions, is
relevant
Leadership and supervisory skills necessary for
larger staffs at regional offices is insufficient to
justify pay differences between men and women
directors. Technical, communications and general
supervisory skills are substantially the same.
Cooke v. National Transportation Safety Bd.
U.S. Court of Federal Claims (2009) (Applying federal
Equal Pay Act).

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Focus is on Duties Performed, not on Job
Titles
Hoban v. Texas Tech Univ. (USDC, WD Texas
2004)
Responder Coordinator and Education
Director are substantially similar. Both
involve training, quality assurance,
establishing protocols and designing
continuing education programs.

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EEOC Compliance Manual
Female hotel clerk without college degree gets paid
less than male clerk with college degree.
Since a college degree is not needed to perform
either job, the skill required to perform both jobs are
the same.

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If jobs are “substantially similar (skill,
effort, responsibility, the pay
difference can be justified by:
1. Seniority System,
2. Merit System, or
3. One or more legitimate, bona fide
factors, such as training, education or
experience, or the quantity or quality of
production.
implies a regular, consistently followed procedure, not
one-off or arbitrary.

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Legitimate and bona fide factors should:
 not based on, or perpetuate, a
stereotype,
 be applied reasonably,
 account for the entire wage disparity, and
 be job-related and based on business
necessity.

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The Equal Pay Case
Employee (or group of employees) must
demonstrate that he/she/they 1) belongs to a
protected class, 2) is paid a lower rate of
compensation 3) for substantially similar work
4) as compared to someone not in the protected
class
Note: Comparison of wage rates is based on all of
employer’s facilities.

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Burden shifts to employer to justify
pay difference:
Seniority System or Merit System,
or one or more legitimate, bona fide factors,
such as training, education or experience, or
the quantity or quality of production:
 not based on, or perpetuate, a stereotype,
 is/are applied reasonably,
 accounts for the entire wage disparity, and
 is/are job-related and based on business necessity.
Use of salary history is not a legitimate factor
to justify pay disparity between a male and
female. Rizo v. Yovino, 9th Cir. (April 9, 2018).

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Employee has opportunity to puncture or undermine
employer’s defense with evidence of:
o Use of past salary history to establish starting pay
o Unequal allocation of supervisor support, coaching and
feedback
o Unequal training and promotional opportunities
o Biased performance appraisals
o Unequal or biased job assignments
o Unequal discipline
o Unequal distribution of overtime
o Stereotyping
o “Suspect” Favoritism, i.e.: the boy’s club.
o Outdated job descriptions
o Unequal or biased parental leave and wage replacement policies

25. Grassmyer v. Shred-It USA, Inc.
(3rd Cir. 2010)
25
 Plaintiffs, three female sales representatives, were
fired for not meeting sales quotas.
 Plaintiffs did not dispute that they failed to meet
sales quotas.
 But they submitted evidence of an overall “men’s
club” atmosphere on the job.
 Men got better assignments
 Men were given more supervision and “ride-
alongs”
 Men were notified directly when positions
became available in “better” territories
 Women were not informed of openings and no
opportunity never requested a new territory.

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Proactive corrective measures to
consider?
o Adopt a employee request policy
o Establish a response protocol
o Review job descriptions
o Analyze current jobs and pay
o Review selection process (interviews and
background checks)
o Review Job Offers and starting salaries
o Review Performance Appraisals
o Review Promotion policies
Note: An employer cannot reduce the pay of any
employee in order to comply with any requirement.

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Beck v. Boeing Consent Decree
Company required to change human resource
practices:
 Comprehensive review of job descriptions
 New way to determine starting salaries
 Revising hiring practices
 Monitoring overtime
 Revamped promotion system
 Tests and training regarding stereotypical thinking
 Annual salary monitoring
 A mechanism for translating performance and pay
 Training supervisors on conducting objective performance evaluations

28. Wall Street Journal,
2016
Is Pay Based on Performance?
Look for categories that may mask bias:
Leadership, Communication, Commitment,
Assertiveness, Energy
5%
16%
27%
24%
18%
10%
0%
5%
10%
15%
20%
25%
30%
A B C D F None
How would you grade the performance
review process in your company?

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Performance Reviews can be vehicles for
“unconscious bias” in the hands of untrained
supervisors
Many HR managers are complicit in “just getting the
boxes checked” to “have something in the file.”

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Appraisal Documentation Must Be:
 Consistent: use same standards for people
in the same job
 Personalized: apply each employee’s
progress toward individual goals
 Measurable: use data to document
performance wherever possible

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Supervisory Training
Performance Appraisals
• Consistency
• Behavior-based
• Objective
• Realistic

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Pay Equity Study – Attorney-Client
Privilege
Regression Analysis
 Measures pay differences after accounting for
productivity-influencing attributes.
 Should be conducted with a lawyer in
consultation with a compensation expert.

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Review Employer Practices Liability Insurance
(EPLI)
 Policy should cover Equal Pay claims
 Check policy limits
 May not cover an “occurrence” outside
the policy timeframe
 May not cover a “class” claim
 Will not cover punitive damages
 May not cover treble damages

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FOR A COMPLETE SUMMARY OF THE LAW
EANJ Members’ Only Website

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Questions?
Thank You