Starting June 1, 2025, New Jersey employers will need to be transparent about employee compensation when posting new job openings and providing notice to existing employees of internal promotional opportunities. The additional disclosure is required by the state’s new pay transparency act, which Gov. Phil Murphy signed into law on Nov. 18, 2024, adding New Jersey to the growing list of state and local governments advancing similar legislation aimed at advancing the goal of pay equity.
Employers should familiarize themselves with the law and begin preparing to comply with its disclosure and recordkeeping requirements when they take effect next year.
Key Requirements for Employers
The law requires employers to disclose pay ranges and benefits information in all job postings, including those for internal transfers and promotions. Employers must provide hourly wage, annual salary, or salary range, along with a general benefits description. Helpfully for employers, businesses are allowed to adjust compensation when making an official offer, allowing flexibility for final salary negotiation.
In addition, employers must make “reasonable efforts” to inform current employees of any promotional opportunities prior to making promotion decisions, unless the promotion is based on seniority or emergent needs. For employers, this means communication about open roles and promotional paths will need to be structured and consistent to avoid potential noncompliance.
Who is Covered
Under the law, employers (including nonprofits, governments and municipalities) with 10 or more employees over 20 calendar weeks, and who conduct business, employ persons, or take applications for employment from individuals in New Jersey must comply with the requirements. Notably, the 10 employees do not have to work in New Jersey for the employer to meet the definition under the law. Consequently, out-of-state employers should presume the law applies to them even though they may not be physically located in New Jersey. Given the law’s ambiguity, out-of-state positions are also likely affected by the law if job applications are collected in New Jersey. Likewise, the law affects employers located or doing business in New Jersey even if they are seeking out-of-state applicants.
The law also applies to job placement agencies and consulting and temporary placement referrals. However, such agencies are not “required to provide [wage or salary information or a description of compensation programs], on job postings that are posted for the purpose of identifying qualified applicants for potential future job openings and not for existing job openings.”
Recordkeeping and Preparation
Employers should maintain records of all job postings, including pay range and benefits information to ensure consistent documentation for each job role’s compensation. By developing and documenting pay ranges now, New Jersey employers can better prepare to meet the new requirements once the law takes effect June 1, 2025.
Furthermore, recruitment and human resources teams may need training to comply with these standards, especially if hiring involves positions outside of New Jersey for which applications are collected in the state, as the law’s reach is broad and extends to multistate recruitment efforts.
Compliance and Penalties
Employers found to be noncompliant with the law face civil penalties or fines of up to $300 for a first violation and $600 for each subsequent violation. Each posting or promotional opportunity that fails to meet the transparency requirements constitutes a separate violation, but employers will not face separate penalties for job listings or promotional opportunities listed on multiple forums. Notably, the law does not permit applicants and/or employees to individually sue for enforcement (no private right of action). Instead, the New Jersey Department of Labor will oversee compliance, addressing concerns and assessing penalties.
The new law does not supersede local pay transparency laws, which can impose stricter requirements and/or higher penalties. For instance, Jersey City previously enacted a pay transparency law requiring employers with five or more employees (including staff and independent contractors) to inform applicants of minimum and maximum salary and/or wages, as well as benefits offered in all job postings. The penalty for violating the Jersey City ordinance is a fine of up to $2,000.
Takeaways
Employers in New Jersey should prepare for the changes required under the law and consider the potential impact on recruiting and retention strategies, especially as similar measures have already been enacted or are scheduled to take effect in other states including New York, California, Washington, Connecticut, Maryland, and Massachusetts.
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