New Jersey’s recently-enacted Pay Transparency Act will usher in significant changes for employers operating in the Garden State. Effective June 1, 2025, the Act mandates that covered employers disclose compensation details in job postings and provide notice of promotional opportunities to current employees.
Who Is Covered?
The Act applies to any employer with 10 or more employees over a period of 20 calendar weeks who:
- Conducts business in New Jersey;
- Employs individuals within New Jersey; or
- Takes applications for employment within New Jersey.
This broad definition encompasses private businesses, public entities, employment agencies, and non-profit organizations.
According to the New Jersey Department of Labor & Workforce Development’s website, the Act applies to any business that has a total workforce of 10 or more employees and is:
- Incorporated, headquartered, or has a store or office in New Jersey;
- Based outside of New Jersey but has at least one employee who works in New Jersey;
- Based outside of New Jersey but regularly contracts with or sells products or services to New Jersey businesses or customers; or
- Based outside of New Jersey but accepts job applications from New Jersey residents.
Notably, these examples from NJDOL broadly interpret the Act’s phrase, “takes applications for employment within” New Jersey.
Job Posting Requirements
Starting June 1, 2025, covered employers must include the following information in all job postings—whether internal or external—for new positions, transfers, or promotions:
- The hourly wage or salary, or a range thereof; and
- A general description of benefits and other compensation programs for which the employee would be eligible.
While employers may offer compensation above the posted range, the initial disclosure aims to provide applicants with an understanding of pay and benefits at the time of application.
Notifications for Promotional Opportunities
The Act also requires employers to make reasonable efforts to announce, post, or otherwise make known promotional opportunities to all current employees in the affected department(s) before making a promotion decision. A promotion is defined as “a change in job title and an increase in compensation.”
Exceptions to this notice requirement include:
- Promotions based solely on seniority or performance; and
- Promotions made on an “emergent basis due to an unforeseen event.”
Enforcement and Penalties
Employers found in violation of the Act may face civil penalties of up to $300 for the first violation and up to $600 for each subsequent violation. Each failure to include the required information in a job posting or to properly announce a promotional opportunity constitutes a separate violation, regardless of the number of postings or forums used.
Steps for Compliance
To prepare for the Act’s implementation, employers should:
- Review and Update Job Postings: Ensure all job advertisements include the required compensation and benefits information.
- Review wage structure for compliance with the Diane B. Allen Equal Pay Act: Ensure that as wages get posted and circulated, these amounts reflect equal pay for equal work, and any disparities are based upon legitimate nondiscriminatory reasons.
- Establish Promotion Notification Procedures: Develop a system to notify all eligible employees of promotional opportunities within their departments.
- Train HR and Management: Educate those involved in hiring and promotions about the new requirements to ensure consistent compliance.
- Coordinate with Third-Party Recruiters: If using external agencies for job postings, ensure they are informed of and comply with the new disclosure obligations.
Conclusion
New Jersey’s Pay Transparency Act represents a significant shift in employment practices. By proactively adapting to these requirements, employers can mitigate potential legal risks.
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