Equal Pay Bill Gains Budget Committee Approval

Weinberg, Sweeney, Cunningham Bill Seeks to the Close Wage Gap

TRENTON – Legislation sponsored by Senate Majority Leader Loretta Weinberg, Senate President Steve Sweeney and Senator Sandra Bolden Cunningham to close the wage gap between men and women in New Jersey was approved today by a Senate committee today.

“Women in this state continue to be shortchanged in pay and professional opportunities,” said Senator Weinberg. “We need to do more to bring equality into the workforce and to treat women and men as equals. This legislation would help to close the wage gap in our state so that women who are working hard to support themselves and their families get the pay they deserve.”

Similar legislation was approved by both houses of the Legislature in 2016 but was conditionally vetoed by then-Governor Chris Christie.

The bill (S-104) would make changes to the law to combat pay discrimination by creating greater transparency and greater protections for employees. It would prohibit unequal pay for “substantially similar” work, and require an employer to demonstrate a different rate of compensation is the result of specific factors, such as training and education.

The legislation would codify into law the State Supreme Court’s interpretation of wage discrimination under the New Jersey Law Against Discrimination that restarts the statute of limitations each time a paycheck is issued. It would also allow back pay for six years, a provision that is stronger than the federal law’s two-year cap. No other state has a time period longer than six years.

“The reality is women continue to make less than men for doing the same work,” said Senator Sweeney. “We won’t have true equality for women until their paychecks treat them fairly and without bias. Equal pay will raise wages for women, helping families to get ahead, and it will benefit the entire state by strengthening the economy.”

And, the legislation would expand equal pay protections from only sex-based discrimination to the characteristics of all classes covered by the Law Against Discrimination.

Women in the United States make roughly only 79 cents for every dollar a man makes, essentially unchanged since 2001. The wage gap is much greater for women of color: African-American women make 58.1 cents for every dollar a man does; for Latinas, the wage statistic is 42.7 cents.

“This is one of the most important actions we have taken because it will have a real impact on people’s lives in a very positive way,” said Senator Cunningham (D-Hudson).  “This legislation will bring transparency to wages to help address this problem. With measures like this, we can change the culture of inequality that still exists in the workplace. Our goal must be to ensure that workers are treated equally, no matter their gender, race, ethnicity, religion or background.”

Between 1980 and 2000, women’s earnings grew while men’s wages remained unchanged, helping to narrow the gap in pay between men and women. However, progress has slowed, and in every state in the nation, women on average still earn less than men, according to research from the Institute for Women’s Policy Research.

Specifically, the legislation, approved by the Senate Budget Committee 13-0, would:

  • Prohibit unequal pay for “substantially similar” work, under the Law Against Discrimination (LAD). The legislation would make it unlawful for an employer to pay a rate of compensation, including benefits, to an employee of one sex less than the rate paid to an employee of the other sex for substantially similar work when viewed as a composite of skill, effort and responsibility, unless specific conditions apply.
  • Require different rate of compensation be justified by factors other than sex. The bill permits an employer to pay a different rate of compensation if the employer demonstrates that the differential is made pursuant to a seniority system, a merit system, or is based on legitimate, bona fide factors other than sex, such as training, education, experience, or the quantity or quality of production. It requires that each factor is applied reasonably, that one or more of the factors account for the entire wage differential, and that the factor or factors do not perpetuate a sex-based differential in compensation, are job-related and based upon legitimate business necessities. Comparison of wage rates would be based on those in all of an employer’s operations or facilities.
  • Restart statute of limitations for each instance of discrimination.  The bill provides that a discriminatory compensation decision or other employment practice that is unlawful under the LAD occurs each time that compensation is paid in furtherance of that discriminatory decision or practice – effectively making each paycheck another instance of discrimination, reflecting the State Supreme Court’s interpretation of wage discrimination under the LAD as well as language in the federal Lilly Ledbetter Fair Pay Act. In addition, the bill provides that liability shall accrue and an aggrieved person may obtain relief for back pay for six years, a provision is stronger than the federal Lilly Ledbetter Act, which has a two-year cap on back pay.
  • Prohibit employer retaliation against employee for disclosing/discussing compensation. Employers could not take reprisals against an employee for requesting, disclosing or discussing information about the job title, occupational category, and rate of compensation of any employees or former employees, as well as other information. It would prohibit an employer from requiring an employee or prospective employee to forego rights to make, discuss, or request those disclosures.
  • Require transparency in state contracting. The bill requires public contractors to provide general information about their workers’ demographics and pay and the bill requires disclosure to employees and their authorized representatives upon request.