The federal Equal Pay Act and the New Jersey Equal Pay Act (“NJEPA”) both prohibit wage discrimination, but the New Jersey law is far broader, more employee-protective, and imposes a much stricter standard on employers. The federal law applies only to sex-based pay disparities.  The NJEPA applies to pay disparities between all protected classes, not just sex.  That is, the NJEPA applies to every protected class identified under the New Jersey Law Against Discrimination (“NJLAD”), which includes, race, age, disability, gender identity, gender expression, national origin, sexual orientation, religion, and other protected traits.  

Under the federal Equal Pay Act, an employee is required to show that a pay disparity exists, when compared to an employee of the opposite sex, for work that is substantially equal in terms of skill, effort, and responsibility when performed under similar working conditions.  In contrast, the NJEPA has a relaxed standard.  The employee does not have to show that the work performed is “substantially equal.”  Rather, the NJEPA requires that the work just be “substantially similar.”  As one New Jersey Court decision stated, the inference is virtually inescapable that when unequal pay is given for the performance of substantially similar work, "impermissible discrimination is afoot.”

Both statues permit an employee to raise affirmative defenses.  With the federal Equal Pay Act, an employer can avoid liability by establishing one of four affirmative defenses.  These affirmative defenses are i) a seniority system; ii) a merit system; iii) a system that measures earnings by quantity or quality of production; or iv) any factor other than sex.  The fourth affirmative defense under the federal Equal Pay Act, “any factor other than sex,” is broadly interpreted by courts. Employers have used the “any factor other than sex” defense by claiming that pay disparities exist because of market forces, prior salary, negotiation history, or subjective “business judgment.”

Employers have much less wiggle room under the limited affirmative defenses available under the NJEPA. Both statutes permit the affirmative defenses of a seniority system and a merit system.  However, the NJEPA does not permit the catch-all “any factor other than sex” defense.  Instead, the NJEPA has an affirmative defense, a “legitimate, non-discriminatory factor,” which requires the employer to satisfy the existence of five elements.  The most crucial element is the last one, which states that the factor must be “job-related with respect to the position in question and based on a legitimate business necessity.”  Importantly, a factor is not deemed to be a “legitimate, non-discriminatory factor” if there are “alternative business practices that would serve the same business purpose without producing the wage differential."

The NJEPA does not require the employee to demonstrate that the employer intended to discriminate. An employee only needs to show that they were paid less than another employee who is not a member of the same protected class for performing substantially similar work. The NJEPA has permits an employee to recover up to six years of wage differentials. If a jury or court determines that an employer violated the NJEPA, the judge is required to award the employee an amount that is three times the monetary damages suffered.

If an employee who works in New Jersey suspects that a pay gap exists with an employee outside of his/her protected class, here are several questions to consider:

• Are there any meaningful, job-related differences that truly justify the pay gap?
• Are there differences in the length of employment with the company?
• Are there any differences in education, training, or experience that are relevant to the job, and can those differences justify the entire wage gap?

Employees who suspect violations of the NJEPA or federal Equal Pay Act should speak with the experienced attorneys at The Law Firm of Morgan Rooks P.C. Call today for a free consultation.