On June 1, 2025, New Jersey's Pay Transparency Act (Act) takes effect. The new Act requires certain New Jersey employers to: (1) make sure job postings include compensation and benefits information; and (2) inform current employees of promotional opportunities.
Is Your Company Subject to the Act?
The Act applies to any employer with 10 or more employees over 20 calendar weeks that conducts business, employs workers, or accepts job applications in New Jersey. Employment agencies are included as covered employers. Because the Act does not limit the 10-employee threshold to New Jersey-based employees, all multistate employers operating in New Jersey with 10 or more employees overall may fall within its scope.
What Requirements Must Employers Follow?
In all external and internal job postings for "new jobs and transfer opportunities," an employer must provide: (1) the position's hourly wage or salary, or a range of the wage or salary; and (2) a general description of benefits and any other compensation programs applicable to the position. The Act does not prevent the employer from ultimately offering higher pay or enhanced benefits to candidates than those listed in the posting.
In addition, the employer must make reasonable efforts to tell all current employees in all affected departments of upcoming promotional opportunities advertised internally or externally. The Act defines "promotion" as "a change in job title and an increase in compensation."
Does the Law Contain Any Exceptions?
Though expansive, the Act contains some exceptions. First, temporary help service firms and registered consulting firms need not disclose pay and benefits in job postings for potential future openings, but the disclosure requirement remains in place for existing openings. Second, an employer need not tell employees about a promotion where the promotion is based on "years of experience or performance" or the promotion occurs on an "emergent basis due to an unforeseen event."
How is the Act Enforced?
The New Jersey Commissioner of Labor and Workforce Development enforces the Act and may impose statutory penalties of up to $300 for a first violation and up to $600 for each subsequent violation.
In a rare feature beneficial to employers, the Act does not give an individual employee a mechanism to sue in court. Thus, employers need not fear an employee-initiated lawsuit based on the Act.
The Bottom Line
To ensure timely compliance with the Act, employers should:
- Update all internal and external job advertisements to reflect required wage, benefit, and compensation details;
- Ensure third-party recruiters and staffing firms posting on the employer's behalf are aware of and follow the law; and
- Develop a procedure for notification of promotional opportunities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
