Over the past several weeks, New Jersey has enacted, or plans on passing, several new bills that secure New Jersey’s position as one of the nation’s leaders in employee protections.  The first, known as the Diane B. Allen Equal Pay Act (“Pay Equity Bill”), bans employers from paying women and other protected groups less than men for similar work.  The second, the New Jersey Paid Sick Leave Act (“Paid Sick Bill”), essentially guarantees all private employees, regardless of company size, paid sick leave/time off for certain qualifying situations.

New Jersey Pay Equity Bill

As previously blogged, on Equal Pay Day (April 10th), Governor Phil Murphy announced he would sign legislation known as the Diane B. Allen Act later that month.  On April 24, 2018, Governor Murphy signed what is considered to be the “most sweeping equal pay legislation in the nation.”

In short, the new law prohibits employers from paying any member of any protected class under the New Jersey Law Against Discrimination lower wages and benefits than their male counterparts.  If an employer pays one person more than another for “substantially similar work”, that employer will have to establish the basis for the pay discrepancy.  New Jersey’s law is for broader protections than other states in that it is not limited to gender only.  Damages for a successful claim include three (3) times the monetary damage for the violation in addition to back wages for up to six (6) years.  Critics of the new law have expressed concern that it departs from the federal standards and makes New Jersey unfriendly to businesses, especially in light of recent changes in the Federal Tax Code.

The Pay Equity Bill becomes effective July 1, 2018.

New Jersey Paid Sick Bill

Governor Murphy also recently pledged to sign the New Jersey Paid Sick Leave Act on May 2, 2018, which will make New Jersey the 10th state with paid sick leave legislation.

Once signed, all private businesses, despite their size, that employ individuals in the State are required to comply with the Paid Sick Bill.  Unlike other legislation, there is no minimum number of hours an employee must work to be eligible for leave under the new law.

Leave can be used for an employee’s own qualifying need or that of a family member,  which is defined to include children, grandchildren, siblings, spouses, domestic partners, civil union partners, parents, and grandparents.  The definition of a “family member” also extends to any individual whose affiliation with the employee is the “equivalent of a family relationship.”  Leave may be used for, among other things: (1) the diagnosis, treatment, recovery, or preventative care of a mental or physical illness(s); (2) to seek counseling, relocation, legal services, and/or medical attention for an employee or family member that is a victim of domestic or sexual violence; and/or (3) to attend a school conference, meeting, or other child-education related event.  In some instances, advance written notice to the employer of the employee’s intention to take paid leave may be required.

Under the legislation, leave begins to accrue on the later of the employment date or the law’s effective date (currently anticipated to go into effect on October 29, 2018) at a rate of one (1) hour for every 30 hours worked. The law does not require employers to allow employees to accrue more than 40 leave hours in a consecutive 12 month period, with such period to be determined by the employer.

Alternatively, employers can provide employees with 40 leave hours on the first day of the benefit year as an alternative to accruing time.  If employers “front load” such leave, employees may carry over accrued but unused leave or employers must offer employees compensation for unused leave by the end of that benefit year.

Employers should consult with an attorney regarding the anticipated employer notice, posting, and record keeping requirements associated with the Paid Sick Bill, as well as determining employee eligibility and duration of waiting periods that may be implemented before leave can be used.

 

On March 27, 2018, the New Jersey Legislature passed the Diane B. Allen Equal Pay Act (the “Act”), which amends the New Jersey Law Against Discrimination (“LAD”), to strengthen protections against employment discrimination and promote equal pay for women.  A link to the Act can be found by clicking here. Governor Phil Murphy, who campaigned vigorously on a platform of women’s rights and equal pay for equal work leading into last year’s election, has indicated he will sign the legislation when it is presented to him, giving New Jersey one of the nation’s most comprehensive equal pay initiatives.  The Act takes effect on July 1, 2018.

The Act amends the LAD by making 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.”  The Act is thus much broader than just advocating gender pay equity.  Instead, the Act expands equal pay on the basis of membership in the protected class which includes, inter alia, 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 identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces.  With the passage of the Act, the LAD, which was already one of the broadest anti-discrimination laws in the country, only intensifies and strengths the protections afforded to members of protected classes who work and/or live in New Jersey.

The Act does, however, carve out limited exceptions concerning when an employer may pay a different rate of compensation to members of the protected class, including if the pay differential is due to a seniority or merit based system.  An employer may also 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.

See here

Under the Act, an unlawful employment practice can occur each time an employer’s pay practices discriminate against an employee, and the employee can seek back pay for a six (6) year period.  Thus, the Act lengthens the statute of limitations for claims based on pay equity to a period of six (6) years in contrast to the LAD’s two (2) year statute of limitations.

Lastly, in terms of damages, if an employer is found guilty of violating the pay practices in the Act described above, a judge or jury can award treble damages for the violation.  Treble damages are also available to an employee who can successfully prove that her employer retaliated against her for requesting, discussing, or disclosing to (i) any other employee or former employee of the employer, (ii)  a lawyer from whom the employee seeks legal advice, or (iii) any government agency, information regarding employee compensation/pay practices.  Likewise, treble damages are available to an employee or prospective employee who is asked by the employer to sign a waiver regarding discussing or disclosing pay practices or rates.

Employers should be aware of the July 1, 2018 effective date for the Act.  In the meantime, businesses should carefully review their employee handbooks as well as hiring and compensation practices to insure pay equity for employees who perform “substantially similar work”.

On Wednesday, March 30, five players for the U.S. women’s soccer team officially joined the national fight for equal pay by submitting a wage discrimination complaint to the Equal Employment Opportunity Commission (“EEOC”).

The players filing the complaint include the most well-known female soccer players in the world — Carli Lloyd, Becky Sauerbrunn, Alex Morgan, Megan Rapinoe, and Hope Solo.  With such noteworthy names attached to the EEOC filing, it has already garnered significant media attention, bringing the equal pay issues confronted by women across the country to the forefront.  As goalkeeper Hope Solo explained:

“In this day and age, it’s about equality. It’s about equal rights. It’s about equal pay. We’re pushing for that. We believe now the time is right because we believe it’s our responsibility for women’s sports and specifically for women’s soccer to do whatever it takes to push for equal pay and equal rights. And to be treated with respect.”

The decorated U.S. women’s soccer team has plenty of accomplishments to brag about, including three World Cup championships, four Olympic gold medals, and generating nearly $20 million more in revenue than the men’s U.S. Soccer team in 2015.  However, the EEOC complaint alleges the women earn significantly less than their male counterparts for identical work.  For example, the EEOC filing cites that while the men would likely earn $263,320 each for winning twenty exhibition games in a season (the minimum required to be played in one year), the women would earn only $99,000 for the same triumph.  In addition, the men each earn between $5,000 and $17,625 for every additional game played beyond the minimum of twenty exhibition games, while the women earn nothing if they play more than twenty games in a season.

The EEOC complaint represents the first step in the litigation process to pursue the women’s discrimination claim.  From there, the EEOC will commence an investigation to determine whether there is probable cause to believe discrimination has occurred.  Both sides are required to cooperate with the EEOC in good faith in its investigation.  If the EEOC finds such cause, it may file a complaint for discrimination in an appropriate court on behalf of the women, or it can issue a “Notice-of-Right-to-Sue” letter, which would allow the women to file a formal court action for discrimination within ninety days.

The complaint filed by these high profile women only serves to highlight the need for further dialogue and discussion concerning equal pay for equal work.  We will post on future developments in this EEOC case as they occur.