Effective July 1, 2018, the New Jersey Law Against Discrimination (LAD) prohibits employers from paying an employee who is a member of a protected class at a rate of compensation (including benefits) that is less than the rate paid to employees who are not members of the protected class for substantially similar work when viewed as a composite of skill, effort, and responsibility (NJ Rev. Stat. 10:5-12(t)). “Member of a protected class” means an employee who has one or more characteristics for which the LAD prohibits employment discrimination including race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability, atypical hereditary cellular or blood trait, liability for military service. It is unlawful for an employer to reduce the pay of any employee to comply with the law.
An employer may pay an employee at a different rate only if the employer demonstrates that the differential is based on a seniority system, a merit system, or demonstrates that:
• The differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class, such as training, education, experience, or the quantity or quality of production;
• The factors are not based on, and do no perpetuate, a differential in compensation based on sex or any other characteristic of members of a protected class;
• Each of the factors is applied reasonably;
• One or more of the factors account for the entire wage differential; and
• The factors are job-related with respect to the position in question and based on a ...