On Trend: New Jersey Hops on the Pay Transparency Bandwagon

New Jersey has joined the growing ranks of jurisdictions that have enacted pay transparency laws.

Senate Bill 2310 (“the Law”) was enacted on November 10, 2024, and approved on November 18, 2024 as Public Law 2024, chapter 91. The Law will take effect on June 1, 2025, i.e., “the first day of the seventh month next following the date of enactment,” and will require most New Jersey employers to disclose a wage or salary range and a general description of benefits and other compensation programs in their job postings and advertisements. The Law also will require covered employers to make “reasonable efforts to announce, post, or otherwise make known opportunities for promotion” to current employees, a feature that is not common in similar laws enacted by other jurisdictions.

Covered Employers

The Law applies to any employer that has 10 or more employees over 20 calendar weeks and does business, employs persons, or takes applications for employment within the state.

Note that employers in Jersey City with five or more employees within Jersey City are already required to comply with that city’s ordinance mandating the disclosure of salary information in postings. This ordinance remains in effect, which means that Jersey City employers with five to nine employees that will be exempt from the state’s law must still comply with the city’s law.

Pay Disclosure Requirement

The Law requires covered employers to disclose in each job opening advertised by the employer (whether internally or externally) the hourly wage or salary, or a range of the hourly wage or salary. In addition, advertisements must include a general description of benefits and other compensation programs for which the employee would be eligible. The Law, however, permits employers to increase wages, benefits, and compensation identified in the job opening posting at the time of offer.

Temporary Help Service Firms

Under the Law, temporary help service firms or consulting firms must provide pay and benefit information to applicants for temporary employment at the time of interview or hire for a specific job opening. The requirement does not apply to job postings that are posted for the purpose of identifying applicants for potential future job openings as opposed to existing job openings.

Notification of Opportunities for Promotion Requirement

The Law requires covered employers to make “reasonable efforts” to announce, post, or otherwise make known opportunities for promotion that are advertised internally or externally to all current employees in the affected department or departments of the employer’s business prior to making a promotion decision. The Law defines a promotion as “a change in job title and an increase in compensation,” but does not specify either what constitutes an opportunity for promotion or what constitutes an “affected department.” The Law does, however, exempt promotions awarded to a current employee “on the basis of experience or performance” from the disclosure mandate. It also permits unadvertised promotions “on an emergent basis due to an unforeseen event.”

Penalties for Noncompliance

Violation of the Law may result in fines of up to $300 for a first violation and up to $600 for a second violation, collectible by the state’s Commissioner of Labor and Workforce Development. The Law does not provide a private right of action for applicants or employees; however, presumably failure to comply could be used as evidence in an action alleging unequal pay, discriminatory failure to promote, and related causes of action.

Next Steps for Employers Hiring in New Jersey

Although the effective date is six months away, New Jersey employers should begin planning for how they will revise their job postings and advertisements. This may entail, for example, establishing pay ranges for positions and procedures for announcing promotion opportunities.

To prepare, covered employers should review their compensation practices, including identifying competitive salary ranges for all positions, and consider conducting a pay equity audit to ensure their pay practices are compliant with state and federal law.

In addition, internal and external recruiters should be prepared to modify their current postings to include the required salary ranges and benefits information. Finally, Human resources and hiring managers will need to pay special attention to the disclosure requirements attendant to promotion opportunities, as these are uncommon and may take some getting used to.

Even employers who are not doing business in New Jersey should pay attention to this trend, especially if they operate in multiple jurisdictions. If pay transparency has not reached your location yet, it could be coming soon.