This year, states such as New Jersey, Massachusetts, and Illinois will implement new pay transparency laws. Generally, these laws require employers to disclose salary ranges in public job postings and internally to employees seeking promotions. By promoting transparency, these laws help prevent employers from offering different salaries based on factors unrelated to job qualifications, such as age, gender, or race. If you have questions about how these laws impact you, consulting a qualified employment attorney can provide valuable guidance.
The New Jersey State Wage Transparency Law
Starting on June 1, 2025, many employers in New Jersey must meet certain transparency requirements. First, they must disclose in each internal or external job posting the hourly wage or salary, or a range of the hourly wage or salary. Second, they must include a general description of benefits and other compensation programs for which the employee would be eligible.
Employers covered by the state’s new law are those with 10 or more employees in over 20 calendar weeks. Further, the employer must do business, employ people, or take applications for employment within the State of New Jersey. The law excludes temporary help service firms and consulting firms registered with the Division of Consumer Affairs in the Department of Law and Public Safety. Employers who violate the law will be subject to financial penalties, which increase with subsequent violations.
Local New Jersey Cities Transparency Laws
Though the state-wide pay transparency law will go into effect on June 1, 2025, some local jurisdictions in New Jersey already have established laws that address transparency. In early 2022, Jersey City enacted a wage transparency law that covers all employers with five or more employees. Under the statute, employers that give notice of employment opportunities are required to disclose a minimum and maximum salary or hourly wage, including benefits, in the job posting. Jersey City’s law also covers independent contractors. Noncompliance with the law can result in fines.
How can Employers comply with these requirements?
To meet the requirements under New Jersey’s new law, employers should establish clear minimum and maximum salary ranges for all job listings posted after June 1, 2025, based on the necessary skills and qualifications for each role. Additionally, they should train staff involved in hiring to ensure compliance with the law and update employee handbooks to reflect these changes. Employers should also retain all documentation related to salary decisions, including the rationale behind setting specific pay ranges for each position.
What other wage laws impact New Jersey employees?
Most private-sector employees across the United States are protected under Section 7 of the National Labor Relations Act, which explains that covered employees may discuss how much they make, make joint requests for pay, and even organize a union or have an outside union bargain with their employer to raise wages and seek other benefits.
Employees should also be aware that New Jersey has enacted a salary history ban that makes it illegal for employers to ask about an applicant’s salary history when applying to a job. This law, in effect since 2020, helps prevent people who may have been underpaid at their previous jobs from being under-compensated in the future. Because of this law, employers will have to rely on a candidate’s experience and qualifications when determining their compensation, not what someone else might have been paying them in the past.
Employers are still permitted to ask applicants about their salary expectations for the position and discuss the compensation being offered. However, applicants should be mindful when sharing salary or benefits history. If they voluntarily disclose this information without being prompted by the employer, it may be considered in determining their new salary. Additionally, employers may inquire about salary history if local, state, or federal laws specifically allow or require them to do so.
Conclusion
As states continue to grant greater workplace protections to employees, many hope that these types of salary transparency laws will lead to pay equity across demographic categories. An experienced attorney can offer guidance on how the recent changes in New Jersey law impact your business or your options as an employee. Contact a member of our team for next steps.
Contributions to this blog by Michael Touma.