ASSEMBLY APPROPRIATIONS COMMITTEE

 

STATEMENT TO

 

ASSEMBLY, No. 1

 

STATE OF NEW JERSEY

 

DATED:  MARCH 22, 2018

 

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 1.

      This bill, entitled the “Diane B. Allen Equal Pay Act,” strengthens protections against employment discrimination and promotes equal pay for all groups protected from discrimination by the Law Against Discrimination, N.J.S.A.10:5-1 et seq. (“LAD”).

      The bill modifies the LAD to make it an unlawful employment practice for an employer to pay a rate of compensation, including benefits, to employees of a protected class less than the rate paid to employees not of the class for substantially similar work, when viewed as a composite of skill, effort, and responsibility.  The bill prohibits any employer paying a rate in violation of the bill from reducing the rate of compensation of any employee in order to comply with the bill. 

      The bill permits an employer to pay a different rate of compensation if the employer demonstrates that the differential is made pursuant to a seniority system or a merit system, or is based on legitimate, bona fide factors other than sex or other characteristics of members of a protected class.  Such factors include training, education, experience, or the quantity or quality of production.  The employer is required to show that it applied each factor reasonably and that each factor is job-related and based upon legitimate business necessities.  The employer must also show that one or more of the factors account for the entire wage differential and that the factors do not perpetuate a differential based on sex or other characteristic of members of a protected class.

      The bill changes the LAD to prohibit an employer from taking reprisals against an employee for discussing with, or disclosing to, other employees or former employees, attorneys, or government agencies information about job titles, occupational categories, rates of compensation, gender, race, ethnicity, military status, or national origin of employees or former employees.  The bill prohibits an employer from requiring, as a condition of employment, any employee or prospective employee to waive rights provided under the law.

      The bill permits the awarding of three-fold damages for violations of its provisions in cases heard before the Division on Civil Rights, and requires three times monetary damages be awarded by a judge in court cases where a jury finds the employer guilty of the violation.          The bill further provides that a discriminatory compensation decision or other employment practice that is unlawful under the LAD occurs each occasion that compensation is paid in furtherance of that discriminatory decision or practice.  This provision restarts the applicable statute of limitations governing discriminatory compensation claims under the LAD, effectively making each paycheck another instance of the discriminatory compensation decision or other practice.  In addition, the bill provides that liability is to accrue and an aggrieved person may obtain relief for back pay for up to six years of the period of time in which the violation has been continuous, if the violation continues to occur within the statute of limitations.

      Finally, the bill requires employers who enter into service contracts with public bodies to provide a report to the Commissioner of Labor and Workforce Development of information regarding compensation and hours worked by employees by gender, race, ethnicity, and job category.  The bill requires employers to report that data by pay bands, which the commissioner will establish by regulation.  The bill provides similar reporting requirements for employers entering into contracts to perform public work.  The bill requires that the commissioner retain and make the information available to the Division on Civil Rights and, upon request, employees and their authorized representatives.

 

FISCAL IMPACT:

      This bill has not been certified as requiring a fiscal note.