The sponsors of pay equity legislation passed by the New Jersey Senate and Assembly earlier this year have announced that the State Senate will attempt to override Governor Christie’s veto of the bill on December 19, 2016.
Senate Bill 992/Assembly Bill 2750 would amend the Law Against Discrimination (“LAD”) to promote gender pay equality. The New Jersey bill follows a trend of recently enacted state laws, in California, New York, Maryland, and Massachusetts, that aim to make it easier for plaintiffs to bring pay equity claims and subject employers to potentially greater damages.
The bill would make it an unlawful employment practice, under the LAD, to discriminate against employees on the basis of sex by compensating an employee of one sex at a lesser rate than an employee of the other sex for “substantially similar work.” The “substantially similar” standard, which diverges from the “equal work” standard of the federal Equal Pay Act, mirrors the California Fair Pay Act, which became effective in January 2016.
Under the proposed legislation, an employer would be permitted to pay a different rate to an employee if it can show that the positions are not “substantially similar” and the difference in compensation is based on factors other than sex, such as training, education, experience, or the quantity or quality of production. However, an employer could not remedy a pay disparity by reducing the compensation of other employees.
In addition, the legislation would:
- Make each occurrence of a pay disparity a violation, causing the statute of limitations to restart each time a paycheck is issued;
- Allow an individual to collect back pay for the entire period during which the pay disparity occurred;
- Permit the award of treble damages for violations;
- Prohibit an employer from taking reprisals against an employee for disclosing information about job titles, occupational categories, rates of compensation, gender, race, ethnicity, military status, or national origin of employees or former employees;
- Prohibit an employer from requiring, as a condition of employment, any employee or prospective employee to waive rights under the law; and
- Require State contractors to provide information concerning every employee employed in connection with the contract, including information regarding the employee’s gender, race, job title, occupational category, and total compensation, and report specified significant changes in employee status during the contract.
When the Governor conditionally vetoed the bill on May 2, 2016, he deleted most of the key provisions of the bill including the “substantially similar work” provision, the ability to collect back pay, the prohibition against an employee’s waiver of rights under the law, and the language requiring State contractors to provide employment information concerning all employees employed under the contract.
The bill originally passed the Senate, 28-4, and Assembly, 54-14, with bipartisan support. To override the Governor’s veto, the bill will need to receive at least 27 votes in the Senate and 54 votes in the Assembly. During Governor Christie’s two terms in office, the Senate has mustered sufficient votes to override a veto on only one occasion, and the Assembly has never had sufficient votes to override the Governor.