Editor: Sanmathi (Sanu) Dev, Esq.
Below is an article written by my colleague, Ralph R. Smith, 3rd, Esq., Co-Chair of our firm’s Labor & Employment Group. If you wish to view additional articles and/or be kept up-to-date with labor & employment issues, visit our HR Resource blog by clicking here.
The Pay Transparency Act of New Jersey (“Act”) became law on November 18, 2024, and goes into effect on June 1, 2025. It requires employers to disclose salary ranges in all job postings, including internal and external postings for new jobs, promotions, and transfers. The law further requires that the employer provide a general description of benefits and other compensation programs for which the successful candidate may be eligible.
The Act applies to employers with 10 or more employees over 20 calendar weeks and who do business, employ persons, and or who take applications for employment within New Jersey, including the State, any county or municipality, or any instrumentality thereof. The law, however, does not indicate whether you count all company employees or only those employed in New Jersey in determining its coverage.
Employers under the Act must disclose the hourly wage, salary, or salary range for job openings and provide a general description of benefits and other compensation programs available for the selected candidate. The law further provides, however, that this requirement does not “prohibit an employer from increasing the wages, benefits, and compensation identified in the job opening posting at the time of making an offer for employment to an applicant.”
In addition, employers must make “reasonable efforts” to announce internal and external promotional opportunities to current employees in the affected department(s) before making a promotion decision.
The law contains various exceptions to its requirements. The notice requirement for promotions does not apply to promotions based on years of experience or performance, or to promotions made on an emergent basis due to an unforeseen event. The law also expressly excludes temporary help service firms and consulting firms registered with the Division of Consumer Affairs in the Department of Law and Safety from the pay and benefit disclosure requirements for job postings posted for the purpose of identifying qualified applicants for potential future job openings. However, this exception does not apply to job postings for existing job openings.
Finally, the law contains certain new employee protections. Employers are prohibited from discriminating against or discharging employees for exercising their rights under the law, including discussing or disclosing pay-related information, and from asking about salary history during the hiring process. Significantly, the law does not contain a private cause of action. Rather, the Commissioner of Labor and Workforce Development may enforce the provisions of this law by seeking civil penalties in an amount no greater than $300 for the first violation and $600 for each subsequent violation.
With the June 1 enforcement date just around the corner, employers should review all internal and external job postings to ensure that they are complying with the new law and likewise confirm that any outside recruiting agencies that are being utilized are also meeting these new transparency requirements. Moreover, if you do business in states other than New Jersey, be aware that New Jersey is not the only state with this type of law: similar laws exist in other states (e.g., Colorado, Maryland, and California to name just a few) so multi-state employers are wise to take steps to comply with the transparency laws in those states as well.
