The topic of pay equity continues to gain attention across the United States, and New Jersey (NJ) is no exception. In fact, NJ is preparing to implement a new pay transparency law that will take effect on June 1, 2025. In short, this new law will require certain employers to disclose salary ranges in job postings and provide current employees with notifications of promotional opportunities.
By mandating more pay transparency, New Jersey seeks to improve pay equity and give workers more insight into potential earnings and benefits. Let’s review the specifics of New Jersey’s upcoming pay transparency law, what it means for employers, and how Human Resources (HR) can help prepare their organizations for these changes.
The New Jersey Pay Transparency Law is set to take effect on June 1, 2025, and it will require employers with 10 or more employees* over 20 calendar weeks that do business, employ workers, or take applications of employment within the state of NJ to include pay range information in job postings and to communicate promotional opportunities to current employees. These changes will apply to both external and internal job postings, which is a major shift from their current process in how employers handle compensation details.
*The law does not specify whether the 10-employee minimum includes employees located outside of New Jersey.
The law’s primary objective is to ensure greater pay equity by making compensation information more accessible and transparent. With these new requirements, both prospective and current employees will have a clearer understanding of the pay and benefits available to them, allowing them to make more informed decisions about their potential job opportunities.
It’s important to note that while the law mandates disclosure, it does still offer some flexibility. Employers need to be transparent, but they can offer higher compensation and additional or enhanced benefits from what they initially communicated or disclosed. This is where HR needs to partner with the hiring managers to make sure pay decisions are well thought out, fair and equitable, and in compliance with the new law.
Let’s take a closer look at the core provisions of the new law and what they mean for employers in New Jersey.
One of the most important aspects of the New Jersey Pay Transparency Law is the requirement for employers to include salary ranges in all job postings, both external and internal. This means that any time a job is posted, whether it’s being advertised to the public or offered as an internal promotion, the employer must include the expected pay range for the role.
Again, the law applies to all employers with 10 or more employees (over 20 calendar weeks that do business, employ workers, or take applications of employment within the state of NJ), so even smaller companies with fewer than 50 employees will need to adjust their hiring practices. The disclosure must include either a specific salary range or an hourly wage, depending on how compensation is structured for the role. Specifically:
Another key requirement under the new law is the obligation for employers to disclose promotional opportunities within their organization. Employers need to make sure that internal employees are informed of available promotions that could involve an increase in compensation or a new title. These promotions must be communicated clearly so all employees have access to the same career opportunities.
The law mandates that employers provide “reasonable efforts” to announce these internal job opportunities to current employees, especially those in the department or role being impacted. This includes posting internal notices on job boards or sending email announcements to relevant employees. Once again, this is where HR can add value and partner with the business on this. Other key points include:
The New Jersey Pay Transparency Law applies to employers with 10 or more employees in the state. This includes businesses, staffing agencies, and temporary help services, as long as they have at least 10 employees working for 20 or more calendar weeks in New Jersey. This coverage means that many businesses across various industries will be subject to the law, even those with small teams.
For temporary agencies and consulting firms, the law requires compensation and benefit information to be shared with potential employees during the hiring process, even though these employers do not have to include salary ranges in public job postings for positions that might not yet be open.
Employers who fall under the 10-employee threshold are not required to comply with the law. However, businesses should monitor whether future legislation could extend requirements to smaller employers, especially as pay transparency continues to gain more traction across the country.
Employers who fail to comply with the New Jersey Pay Transparency Law could face significant penalties. The New Jersey Department of Labor and Workforce Development will be the primary agency responsible for enforcement. If employers are found in violation of the law, they could face:
It’s important to note that the law does not grant employees the right to file lawsuits against employers for non-compliance. Instead, the state will take enforcement actions, which means employers must be prepared for possible audits or investigations.
To avoid penalties, HR teams should take proactive steps to ensure that job postings and internal promotional announcements comply with the law. Regular audits and review of job postings and compensation information will help confirm that employers are meeting the new requirements.
As New Jersey employers prepare for the law’s effective date, HR departments should begin to implement several best practices to ensure compliance:
The New Jersey Pay Transparency Law, set to take effect on June 1, 2025, represents a significant shift in how employers need to handle compensation and internal promotions. The law seeks to enhance pay equity and support fair treatment of workers by requiring salary ranges in job postings and mandatory announcements of promotional opportunities,
With the deadline for compliance quickly approaching, now is the time for HR to work with their New Jersey employers and start making the necessary adjustments. By reviewing job posting practices, enhancing internal promotion processes, and conducting pay audits, employers can meet the requirements of the new law and avoid costly penalties.
In order to remain compliant, consider consulting with compliance experts or conducting a pay equity audit to ensure that your pay practices align with the law. Staying ahead of the changes will position your organization as a leader in fairness and transparency. OutSolve welcomes partnering with your organization to help with these new and critical requirements.