As we have reported on a few times, there is a big gender wage gap for women and a wage gap for minorities in this nation. Well, New Jersey (the 11th most populous state in the nation) has decided to do something about it. They have just passed a new law, known as the Diane B. Allen Equal Pay Act, which some experts say is the strongest law anywhere in the nation when it comes to mandating equal pay for equal work.
The new governor of New Jersey, Phil Murphy, has stressed equal pay for equal work since stepping into office on January 1. While he has been pushing for this, the fact is that many agree with him as there is little disagreement in the state that the law and more regulation is needed. This is shown by the fact that the Diane B. Allen Equal Pay Act was passed in late April 35 to 0 in the Senate and 74-2 in the Assembly. It has overwhelming support from both Republicans and Democrats.
Many experts, as well as the NJ legislature, say it is the strongest law anywhere in the nation for mandating equal pay for minorities and women. It is putting companies on notice that salary discrepancies based on gender, race, age, ethnicity, and other factors is no longer acceptable, and that it will be “punished”.
Key parts of the Diane B. Allen Equal Pay Act
There are a few things in the Pay Act that can really make a difference. One of the key ones is companies can’t punish workers from discussing their salaries or benefits. This should make salary discrepancies more apparent to employees as workers can now discuss how much money they make.
Many companies do not pro-actively share salary information among their employees. They also prohibit employees from discussing how much money they make. I experienced this first hand during my time in the corporate world; the employees couldn’t just go around the office discussing how much they earn.
The reason is that people have different experiences, skillsets, job responsibilities, etc. and salaries could vary due to that. But New Jersey is taking the approach that openly discussing salaries can’t be punished by employers, and they hope this transparency among employees makes it more apparent when women and others are not being paid the same as men.
Now if companies do try to pay women and/or minorities differently (and there is no reason for doing that), then the company will be punished. The worker who was underpaid can now sue for up to 3 times of what they were underpaid. So if they were underpaid 50K, they can sue the company for 150K. In addition, they can sue for up to 6 years of wage discrepancies, which is three times longer than federal government rules.
What all this means is that if a company still does not pay women and minorities the same wages/benefits as they pay men, and if the company gets “caught” doing this, the women or minority worker can sue for more money and going back more years. The costs can add up for a company.
The goal of the Diane B. Allen Equal Pay Act is to close the gap between what male workers are paid and what women as well as minorities are paid. It is long overdue, not just in New Jersey but nationwide. We applaud the state’s effort and hope it succeeds.