Thought Leadership

Key Points:

• June 1, 2025, the Pay Transparency Act takes effect in the state of New Jersey.
• Under the Act, employers are required to include the salary and/or hourly wage range being considered for a vacant position. 
• Employers must also disclose in job postings a general description of the benefits and other compensation programs to which the employee would be eligible.
• Failure to comply can result in monetary fines for each violation.

New Jersey has officially joined a number of other states in adopting a pay transparency law, and the time has officially come for the Pay Transparency Act to take effect in New Jersey. As you may recall from last year, on November 18, 2024, Governor Phil Murphy signed the Pay Transparency Act into legislation (Bill S2310/A4151), which largely affects employers both within New Jersey or who do business in New Jersey. 

The Act, which officially becomes effective on June 1, 2025, requires employers to include as a part of a posting for a job position, the hourly wage or salary range being considered for the position. Employers will also now be required to include in any job posting a general description of the benefits and other compensation programs for which the employee would be eligible. The Act applies to jobs that are both internal and external, as well as positions available through promotion or transfer opportunities. Employers are required to “make reasonable efforts to announce, post, or otherwise make known opportunities for promotion,” to all current employees in the affected department(s) before a promotion decision is made. 

The Act applies to an employer in any form of a business that has ten or more employees for a period of more than 20 calendar weeks per year. Additionally, the Act applies to any businesses that conduct business in New Jersey, employ individuals within New Jersey, or even accept employment applications from individuals within New Jersey. It expands to explicitly include employment agencies and/or other third-party agencies, such as referral agencies, as employers who are required to abide by the transparency laws. 

As of June 1, 2025, if a business fails to comply with these transparency requirements, the Act includes penalties for any violations. Such penalties include fines of $300.00 for the first violation and $600.00 per subsequent violation. Under the Act, a particular job opportunity is deemed one violation, regardless of the number of platforms the position may be advertised across or number of individual postings within the post. Any and all fines will be received by the the Commission of Labor and Workforce Development.

While the Act requires that salary and hourly wage ranges be disclosed, these ranges should be the baseline for what an employee may receive as compensation in that position. Of course, if the employer decides to offer an applicant higher compensation than what was disclosed on the job posting, they are permitted to do so at the time of hire.

There are a few exceptions, which are laid out by the Act, such as how these requirements apply to promotions. The Act specifically defines a promotion as “a change in job title and an increase in compensation.” In circumstances where a promotion for a current employee is awarded based upon performance and/or years of experience, there is no notification requirement to post the position. Additionally, there is an exception, although narrow, that allows an employer to promote an employee on an “emergent basis due to an unforeseen event.” However, at this time, no guidance is provided as to what qualifies as an “emergent basis” or an “unforeseen event,” which leaves room for interpretation. 

It is important for employers to recognize that, while the Pay Transparency Act does not create a private cause of action for any employee or individuals who may apply for a position, there is still the possibility an individual may bring a cause of action under the Conscientious Employee Protection Act (CEPA) if they report their employer’s failure to comply with Act and afterwards feel they have been a victim of retaliation by the employer for their reporting. 

Employers should be mindful of this law in New Jersey, as well as other states that may have adopted similar legislation or already have similar legislation in effect. Pay transparency is now the rule in New Jersey. 

*Kimberlin is a member of our Professional Liability Department and works in our Roseland, NJ office.

_{Defense Digest, Vol. 31, No. 2, June 2025, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2025 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}