NJ Governor Murphy Signs Historic, Sweeping Equal Pay Legislation that will balance the playing field for women receiving workers' compensation benefits for occupational injuries and illnesses.
Fulfilling his commitment to fight gender inequity and support equal pay for women in New Jersey, Governor Phil Murphy today signed into law the most sweeping equal pay legislation in America. The Diane B. Allen Equal Pay Act, named for former State Senator Diane Allen who herself was a victim of bias, strengthens protections against employment discrimination and promotes equal pay for all groups protected by the Law Against Discrimination (LAD).
“From our first day in Trenton, we acted swiftly to support equal pay for women in the workplace and begin closing the gender wage gap,” said Governor Murphy. “Today, we are sending a beacon far and wide to women across the Garden State and in America – the only factors to determine a worker’s wages should be intelligence, experience, and capacity to do the job. Pay equity will help us in building a stronger, fairer New Jersey.”
The legislation amends the LAD to make it a prohibited employment practice for employers to discriminate against an employee who is a member of a protected class. Employers will not be able to pay rates of compensation, including benefits, less than the rate paid to employees not of the protected class for substantially similar work, when viewed as a composite skill, effort, and responsibility.
The bill also prohibits employers from taking reprisals against employees for discussing their pay with others – and provides for three-times the monetary damages for a violation. Furthermore, the aggrieved employee may obtain relief for up to six years of back pay and it allows courts to award treble damages for violations of the law.
"Disability rates for workers' compensation benefits in the State of New Jersey are based upon the computation of the wages of the injured employee. Statutorily, the wages are defined to mean “the money rate” at which the service rendered is compensated. That rate is determined by the wages in effect according to the contract of hiring in force at the time of the accident or exposure of the employee. The use of wages as the base for computing compensation benefits is consistent with the view of workers' compensation as a system which places the cost of employment-related disability on the industry in which it occurs. Tomarchio v. Township of Greenwich, 75 N.J. 62, 379 A.2d 848 (1977)." Gelman, Jon L, Workers’ Compensation Law, 38 NJPRAC 16.1 (Thomson-Reuters 2018).
In New Jersey, the median salary for women working full-time is just over $50,000, or $11,737 less than the median annual salary for a man. Across all races, women working full-time, on average, earn 82 cents for every dollar earned by a male doing similar work. African-American women earn about 60 cents for every dollar earned by a white male while a Latina earns only 43 cents. Overall, the economic cost of this disparity totals an estimated $32.5 billion a year in lost wages and economic power.
According to the National Women’s Law Center, a 20-year old woman beginning a full-time year-round position may lose $418,800 over a 40-year career in comparison to her male colleague. When that male colleague retires at age 60 after 40 years of work, the woman would have to work 10 more years – until age 70, to close this lifetime wage gap.
The Diane B. Allen Equal Pay Act becomes effective July 1, 2018.
Sponsors of the legislation include Senate President Steve Sweeney, Senators Loretta Weinberg and Sandra B. Cunningham as well as Assembly members Pamela R. Lampitt, Joann Downey, Valerie Vainieri Huttle, Raj Mukherji, Shavonda E. Sumter and Paul D. Moriarty.
Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters).