Legal Blogs and Updates

What is the New Jersey Pay Transparency Act?

Signed into law by Governor Philip D. Murphy in November 2024, the Pay Transparency Act (the “Act”) requires New Jersey employers to include wage and benefit information in all promotional opportunities and employment listings beginning on June 1, 2025.

Who is affected and what are covered employers required to do?

The Act defines an employer as any person, company, corporation, firm, labor organization, or association that has at least 10 employees over 20 calendar weeks and does business in New Jersey, employs persons within New Jersey, or takes applications for employment within New Jersey. Job placement, referral agencies, and other employment agencies are included in the definition of employer if they meet the above requirements.  While the Act does not require temporary help service firms or consulting firms that are registered with the Division of Consumer Affairs to include compensation ranges in job postings, such organizations are required to disclose that information when they interview a candidate or when they hire a candidate for a specific job.

Covered employers that advertise a promotion, new job, or transfer opportunity must disclose in writing the hourly wage or salary (or the hourly wage or salary range) for the position, as well as a general description of all the benefits and other compensation programs for which the applicant would be eligible. When making an offer of employment to an applicant, employers may, however, offer higher wages or compensation or greater  benefits  than what was listed in the job posting.

Further, if an employer advertises a position (internally or externally) that could qualify as a promotion for an existing employee, that employer must make “reasonable efforts” to announce, post, or otherwise make known the job opportunity to all current employees in the affected department(s) prior to making any decision about who will be hired to fill the position. Promotions that are based on years of experience or performance are excluded from this provision. Promotion decisions made on an “emergent basis due to an unforeseen event” are also excluded.

A promotion is broadly defined in the Act as “a change in job title and an increase in compensation.” The Act, however, does not explain what constitutes a reasonable effort, an emergent basis, or an unforeseen event. New Jersey has not yet issued compliance guidance on these questions and employers should be aware that guidance may be forthcoming.

What if a covered employer does not comply?

The Act does not provide an employee/applicant the right to file a lawsuit (private right of action) against the employer, but the New Jersey Commissioner of Labor and Workforce Development is authorized to impose a civil penalty of up to $300 for an employer’s first violation, and a civil penalty up to $600 for each subsequent violation. An employer’s failure to comply with the Act for one job opening or promotional opportunity constitutes one violation, even if an employer posts the opening on multiple sites and forums.

Am I affected if I am not a New Jersey employer?

This law is applicable to covered New Jersey employers only. However, pay transparency laws are quickly being enacted across the country. Currently, 15 states and the District of Columbia have wage transparency laws. Wage transparency laws in the following five of those 15 states go into effect in 2025:: Illinois, Massachusetts, Minnesota, New Jersey, and Vermont. Several cities have also adopted wage transparency local laws: Cincinnati, Ohio; Ithaca, New York; Jersey City, New Jersey; New York City, New York; and Toledo, Ohio. Another 12 states have considered enacting wage transparency laws in the past few years.

Additionally, in March 2023, Representative Eleanor Holmes Norton (D.C.) introduced the Salary Transparency Act—a federal law that would amend the federal Fair Labor Standards Act to require all employers to disclose a wage range in all employment opportunity postings. The bill was referred to the Committee on Education and the Workforce and is still pending.

Because wage transparency laws are becoming the norm, employers across the country should pay attention to the new laws in New Jersey, Illinois, Massachusetts, Minnesota and Vermont and be prepared to comply with wage transparency legislation in the state(s) in which they operate a business.

Does the Act supersede local pay transparency ordinances?

No.  The New Jersey wage transparency law does not supersede local ordinances, which are often more restrictive..  For example, Jersey City previously enacted a pay transparency ordinance that requires employers with 5 or more workers (including employees and independent contractors) to include in job postings of the salary range for the position, as well the benefits it offers.  Employers that fail to comply with that ordinance can incur a fine of up to $2,000.

What should employers do?

Employers that do business in New Jersey, employ persons within New Jersey, or take applications for employment within New Jersey must comply with the Act by June 1, 2025. Employers should review and update internal job posting procedures—including those that apply to internal promotion opportunities—to ensure compliance with the new requirements. Employers should establish salary ranges for all positions and train human resources and recruitment teams on how to comply with the Act. Employers that conduct business in multiple states must understand the pay transparency requirements in each of those states (and any local ordinances that are in effect in the municipality where they operate) to ensure compliance.

If you have questions about the Act, contact Connell Foley’s Labor and Employment team for assistance.