An employer who violates the requirements of the Act will be subject to a civil penalty of up to $300 for the first violation and up to $600 for each subsequent violation. 

On November 18, 2024, Governor Philip D. Murphy signed into law the Pay Transparency Act, requiring New Jersey employers to identify wage or salary information in internal and external job postings. This new law will take effect on June 1, 2025, at which time New Jersey will join a growing number of states that have enacted wage transparency legislation, including California, Colorado, Connecticut, the District of Columbia, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont and Washington.

Posting Requirements

The Wage Transparency Act applies to employers with 10 or more employees over a period of 20 calendar weeks who conduct business, employ workers or accept applications in the state. The Act does not specify whether the employer must have 10 or more employees in New Jersey. Because the Act is silent on this point and other New Jersey laws with numeric headcounts include employees working anywhere (such as the New Jersey Family Leave Act), employers with 10 or more employees total should prepare for compliance, regardless of whether they have 10 or more employees working in the state. The Pay Transparency Act also applies to job placement, referral agencies and other employment agencies.

Beginning June 1, 2025, all covered entities will be required to disclose the following information in all internal and external postings for new jobs, transfers and promotion opportunities: (i) the hourly wage or salary, or a range of the hourly wage or salary, and (ii) a general description of benefits and other compensation programs for which an employee in the position would be eligible. Nothing in the law prohibits an employer from increasing the wages, benefits and other compensation offered to an applicant beyond that which is posted. Temporary help service firms and consulting firms are not required to disclose pay and benefits until an employee is interviewed or hired for a specific job.

The law also requires employers to make reasonable efforts to announce, post or otherwise make known to existing employees any opportunities for promotion in their department that are advertised internally or externally. However, this notification requirement does not apply to promotions for current employees based on years of experience or performance and does not preclude employers from making a promotion on an emergent basis based on unforeseen circumstances.

Enforcement

The Pay Transparency Act does not provide for a private right of action by an employee. The New Jersey Commissioner of Labor and Workforce Development has enforcement authority. An employer who violates the requirements of the Act will be subject to a civil penalty of up to $300 for the first violation and up to $600 for each subsequent violation. An employer’s failure to comply with the law for a single promotion, job opening or transfer opportunity will be considered one violation, even if that opportunity is posted or listed through multiple means.

What This Means for Employers

The Pay Transparency Act is one more step in a series of measures taken by the state of New Jersey to promote pay equity. To ensure compliance by June 1, 2025, employers hiring or doing business in New Jersey should consider conducting a privileged audit with the aid of legal counsel to determine compensation ranges for various positions and address pay differentials that require correction, particularly given the broad reach of New Jersey’s Diane B. Allen Equal Pay Act. Employers also should plan to update job postings, establish systems to notify current employees about promotion opportunities, and provide guidance to human resource professionals on the new disclosure requirements.

For More Information

If you have any questions about this Alert or have specific questions and concerns related to your operations, please contact Kathleen O'Malley, Anshul S. Agrawal, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.