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The Equal Pay Act is not just for women anymore

This is the first of two installments addressing the Diane B. Allen Equal Pay Act (the “Allen Act” or “Amendment”), an amendment to the New Jersey Law Against Discrimination (“LAD”), which the New Jersey Legislature passed On March 27, 2018 and which becomes effective July 1, 2018.  The Allen Act broadens the protections provided under the New Jersey Equal Pay Act (“EPA”). But what does that mean, exactly.

The former EPA, which was enacted in 1952 and reaffirmed in 1970, prohibited gender-based discrimination in wages.  See N.J.S.A. 34:11-56.2 (“No employer shall discriminate in any way in the rate or method of payment of wages to any employee because of his or her sex.”).  To enforce this prohibition, the EPA also provided a private cause of action for individuals who have been subjected to gender-based discrimination in wages.

The Allen Act goes further – it extends the prohibition from gender-based pay disparities to prohibiting pay disparity based on any characteristic relating to one’s membership in a protected class.  Thus, under the Allen Act, it is not only an unlawful employment practice to pay women less than men for “substantially similar work,” it is also unlawful to pay any member of a protected class – which includes, among others, race, creed, country of national origin, marital status, age, pregnancy, sexual orientation, service in the military – less than those who are not members of that protected class for substantially similar work.

Under the old regime, the key question generally comes down to whether the claimant was paid less for performing work that was “substantially similar” to that of her male counterpart.  Once the claimant has made this showing, the burden shifted to the employer to provide a nondiscriminatory reason for the difference in pay.

This is an exceptionally fact-sensitive analysis, focusing on the “common core” of tasks between the claimant and the person against whom the claimant’s wages are being compared.  Relevant factors include “the ‘quantity and quality of production, education, relevant prior work experience, conduct, and skill.’”

The analysis under the Allen Act is likely to proceed along largely similar lines, albeit with some significant differences.  First, as noted above the pay disparity need not be based on gender. Second, the Allen Act makes explicit that the “[c]omparisons of wage rates shall be based on wage rates in all of an employer’s operations or facilities.” Thus, employers can no longer argue that the pay rates should be based on a smaller subset of employees.  Of note, the Allen Act also expressly prohibits employers from lowering the pay rates of their employees to comply with the Amendment.

In addition to the above discussed changes to the EPA, the Allen Act also contains significant changes to the damages that can be recovered for pay disparity claims as well as changes to the applicable statute of limitations. These changes will be addressed in our second and final installment of our update.

(1) See Grigoletti v. Ortho Pharm. Corp., 118 N.J. 89, 106 (1990).
(2) See Allen Act, Subsection 11(t).
(3) Grigoletti, supra, 118 N.J. at 108-09.
(4) Id. (citing 29 CFR § 1620.13).
(5) See id.

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