Federal law and New Jersey state law generally prohibit wage discrimination, in which an employer pays different wages to employees of different genders who hold substantially similar positions or have substantially similar job duties. As the issue of wage disparity between male and female employees gains attention nationwide, understanding these laws is critically important. It can be difficult to establish that one employee has the same job as a higher-paid employee. Some employers, however, prevent workers from ever reaching that point by prohibiting their employees from disclosing or inquiring about wage information with co-workers. This practice, commonly known as “pay secrecy,” remains common despite laws prohibiting it at the federal and state levels.
The federal Equal Pay Act amended the Fair Labor Standards Act (FLSA) to ban payment of different wages to male and female employees for jobs requiring “equal skill, effort, and responsibility…performed under similar working conditions.” 29 U.S.C. § 206(d). The law allows exceptions for seniority, merit, and quantitative or qualitative factors, and the broadly-construed “differential based on any other factor other than sex.” Id. A bill that would have limited this last category, the Paycheck Fairness Act, died in the Senate in 2014. New Jersey law merely states that employers may not discriminate in the payment of wages based on sex, and it allows exceptions for any “reasonable factor or factors other than sex.” N.J. Rev. Stat. 34:11-56.2.
In order to assert their rights under federal or state wage discrimination laws, employees must know that a difference in wages exists. Many employers keep that from happening by enacting pay secrecy policies. Among private-sector employees, estimates of how many are subject to such policies range from one-third to more than 60 percent. Penalties for discussing pay rates or inquiring about pay rates can include anything from reprimands to termination.