Yesterday, New Jersey’s Assembly Labor Committee recommended the passage of the Gender Pay Equity bill. The proposed law prohibits unequal pay for “substantially similar” work and provides that such acts violate New Jersey’s Law Against Discrimination (“LAD”). The legislation makes 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,” defined as being comprised of skill, effort and responsibility. The bill is identical to the version the Senate committee previously approved. The last step for the legislation will be final votes by both houses, which is expected in the upcoming weeks.

Employers should be aware that the Gender Pay Equity law provides for treble damages for some violations, and considers each paycheck issued based on a discriminatory basis a new, separate violation of the LAD for statute of limitations purposes. The law also allows for an aggrieved employee to obtain relief for back pay for the entire period of time in which the violation has been continuous, if the violation continues to occur within the statute of limitations.

The proposed law would prohibit employers from retaliation against an employee for disclosing or discussing compensation with or about current or former employees. When the law is passed, employers should review their employee handbooks and policies and revise any policies that prohibit employees from discussing compensation.