Update: Governor Murphy Signs NJ Pay Transparency Legislation

Seyfarth Synopsis: On November 18, 2024, Governor Murphy signed into law pay transparency legislation, Senate Bill 2310, which will require employers to include a pay range in job postings and provide notice of promotional opportunities to current employees.  The law goes into effect June 1, 2025.

On November 18, 2024, New Jersey Governor Phil Murphy signed into law Senate Bill 2310.  Once in effect, the law will require employers to:

1. 1. Make reasonable efforts to announce, post, or otherwise make known advertised opportunities for promotion to all current employees in the affected department(s) of the employer’s business prior to making a promotion decision; and
   2. Disclose in each posting for new jobs and transfer opportunities the hourly wage or salary, or a range of the hourly wage or salary, and a general description of benefits and other compensation programs for which the selected candidate would be eligible.

The law will take effect on June 1, 2025.

Which Employers Are Covered Under the Law?

The law broadly defines a covered “employer” as any person, company, corporation, firm, labor organization, or association which has 10 or more employees in over 20 calendar weeks and does business, employs persons, or takes applications for employment within the State of New Jersey.  Job placement, referral agencies, and other employment agencies are included in the definition of “employer”. 

What Must Employers Disclose and What Job Postings Are Covered?

The law addresses two distinct requirements. First, a “notice” requirement to internal employees in an impacted department for promotion decisions.  Second, the disclosures that must be included in a job posting for a new job or transfer opportunity.  Both requirements cover both internal and external advertisements.

First, where an employer advertises opportunities for a promotion either internally or externally, the employer must make “reasonable efforts” to announce, post, or otherwise make known such promotional opportunities to all current employees in the affected department or departments of the employer’s business prior to making a promotion decision.  The law defines promotion to mean “a change in job title and an increase in compensation.”  As written, the law’s notification requirements are triggered when an employer advertises a promotional opportunity internally within the employer or externally on internet-based advertisements, postings, printed flyers, or other similar advertisements.  The notification requirements would not apply if a current employee is awarded a promotion based on years of experience or performance. The language of the law is vague, but likely intends to exclude non-competitive “in-line” or progression promotions.  The law also includes an exception for promotions on an “emergent basis due to an unforeseen event” – under those circumstances, no notice to current employees is required before making the promotion decision.

Second, the law covers the information that must be included in job postings for new jobs and transfer opportunities.  In such postings, the employer must disclose the hourly wage or salary, or a range of the hourly wage or salary.  The employer must also include a general description of benefits and other compensation programs for which the selected candidate would be eligible.  The law specifies that an employer may offer an applicant higher wages, benefits, and other compensation than that indicated in the posting.  Interestingly, “transfer opportunities” is not defined.  Presumably, a transfer would only apply to internal employee job moves, and could include promotions.  However, the term “promotions” was expressly excluded from the final version of Section 1(b) of the bill.  Additional clarification regarding this provision from the Department of Labor and Workforce Development would be welcomed before the law’s effective date, as employers will have practical challenges in implementing such a requirement. 

Temporary Help Service and Consulting Firm Exception

The law includes an exception for temporary help service firms and consulting firms registered with the Division of Consumer Affairs in the Department of Law and Public Safety.  For job postings that are posted for the purpose of identifying qualified applicants for potential future job openings – and not existing job openings – such firms are not required to include the standard pay and benefits disclosures.  Such firms, however, must provide the pay and benefit information to an applicant for temporary employment when they are interviewed or hired for a specific job opening.

Enforcement and Potential Penalties

The law will be enforced by the Commissioner of Labor and Workforce Development in a summary proceeding.  Employers found to have violated the law will be subject to civil penalties in the amount of $300 for a first violation, and $600 for each subsequent violation.  The law does not contemplate a private right of action.

Under the law, an employer’s failure to comply with the promotional opportunity notification requirements will be considered one violation for all listings of a particular promotion, even if that promotion is listed on multiple forums.

With respect to the pay and benefits disclosure requirements, an employer’s failure to comply for all postings for a particular job opening or transfer opportunity will be considered one violation regardless of the number of postings that list, or forums that advertise, that job opening or transfer opportunity.

Seyfarth’s Pay Equity Group is continuing to monitor this area for additional updates and is available to assist employers with navigating these new requirements and the ongoing trend toward greater pay transparency.  For additional information, we encourage you to contact the authors of this article, a member of Seyfarth’s Pay Equity Group, or any of Seyfarth’s attorneys.