N.J. Legislature Tells Employers to Be Transparent About Pay, Promotions

New Jersey is the latest state to advance pay transparency requirements. On Sept. 26, the New Jersey Legislature passed Senate Bill 2310, which if signed and enacted by Gov. Phil Murphy (as is expected) would mandate that certain New Jersey employers disclose wage or salary ranges and general benefits information in each job posting/advertisement. The bill would also require that employers take “reasonable” steps to make opportunities for promotions known to current employees.

Applicability

The bill broadly defines “employer” as “any person, company, corporation, firm, labor organization, or association which has 10 or more employees over 20 calendar weeks and does business, employs persons, or takes applications for employment within this state.” Notably, there is no language requiring that employees be located within New Jersey to be counted. Therefore, even though the law is ambiguous, enforcement agencies likely will take the position that employers with 10 or more out-of-state employees could be subject to the bill’s posting requirements (regardless of whether they have any employees located in New Jersey) if they do any business in New Jersey or accept any employment applications in New Jersey, at least until the law is clarified or the issue is litigated. The bill also applies to job placement, referral, and employment agencies.

Job Postings

Under the bill, covered employers would be required to disclose in each posting for new jobs and transfer opportunities the range of the hourly wage or salary for the position and a general description of benefits and other compensation programs for which the employee would be eligible. Notably, the bill allows employers to increase the wages, benefits, and compensation identified in the job posting at the time of making an offer for employment to the applicant.

Promotional Opportunities

The bill would require covered employers to make “reasonable efforts” to announce, post, or otherwise make known opportunities for promotion (whether advertised internally or externally) to all current employees in the affected department or departments of the employer’s business prior to making a promotion decision. The bill defines promotion as “a change in job title and an increase in compensation.” There are notable exceptions to this requirement. For instance, a current employee who is awarded a promotion on the basis of years of experience (that is, tenure) or performance would not be subject to the bill’s notification requirements. Additionally, the bill does not prohibit employers from making a promotion on an emergent basis due to an unforeseen event.

Penalties

An employer’s failure to comply with the bill’s provisions in connection with a particular job opening or transfer opportunity would be considered one violation regardless of the number of postings that list, or forums that advertise, that job opening or transfer opportunity. Similarly, an employer’s failure to comply with the bill’s provisions in connection with a particular promotional opportunity would be considered one violation for all listings of that promotion, even if that promotion is listed on multiple forums.

Any employer that fails to comply with the requirements of the bill would be subject to a civil penalty not to exceed $300 for the first violation and $600 for each subsequent violation. The bill provides the New Jersey Department of Labor and Workforce Development with the power to enforce these penalties. Applicants and employees would not have a private right of action.

Timing

Murphy has 45 days to sign and enact the bill into law. Its requirements would go into effect six months from the date of enactment.

Interplay with Local Laws

Employers doing business in New Jersey must also consider and comply with more onerous local pay transparency requirements. For example, Jersey City’s Ordinance 22-045 requires that all employers with five or more employees in the city include a minimum and maximum annual salary or hourly wage in all job postings for a Jersey City position. The range may extend from the lowest to the highest salary that the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion, or transfer opportunity. Under the ordinance, job postings include general employment opportunities, transfers, promotions, and even independent contractor opportunities—whether permanent or temporary. The penalty for noncompliance with the Jersey City law is a fine of up to $2,000.

Related Pending Bill

Another pay transparency bill (Assembly Bill 4625) currently pending before the New Jersey Legislature would require New Jersey employers to include in all public job postings a statement disclosing whether the posting is for an existing vacancy. Under the proposed bill, if the posting is for an existing vacancy, the employer would also be required to provide an estimated time frame of when the position will be filled. The proposed bill would also require employers to remove job postings within two weeks of the date the position is filled.

What to Do Next?

Assuming that S2310 is signed into law, employers should begin preparing by making sure their human resources and recruiting departments, as well as third parties they use for posting positions, are informed of and prepared to comply with the new requirements. Employers with operations in New Jersey should determine and document hourly or salary ranges for each job classification using existing or benchmarking data to determine a good-faith range of pay. Employers with questions should consult with employment counsel to discuss these new posting and disclosure requirements.

Lauren J. Marcus, Amber M. Spataro, and Francis A. Kenny are attorneys with Littler in Newark, N.J. © 2024 Littler. All rights reserved. Reposted with permission.