New Jersey’s Pay Transparency Act: What Business Owners Need to Know Before June 2025

As business owners prepare for the second half of 2025, a significant change to New Jersey employment law is on the horizon. On November 18, 2024, Governor Phil Murphy signed the Pay Transparency Act into law, which will take effect on June 1, 2025. This legislation creates new disclosure requirements for job postings that will impact how businesses recruit and promote employees.

Who is Affected by the New Law?

The Pay Transparency Act applies to employers who:

• Have 10 or more employees over 20 calendar weeks, and
• Conduct business in New Jersey, employ individuals within New Jersey, or take applications for employment within New Jersey

It’s important to note that the 10-employee threshold is not limited to New Jersey-based employees. This means out-of-state businesses that do even minimal business in New Jersey may be subject to these requirements if they meet the employee threshold anywhere in their operations.

Key Requirements for Business Owners

1. Salary Range Disclosure

For all job postings and promotional opportunities, employers must disclose:

• The hourly wage or salary, or a range of the hourly wage or salary, and
• A general description of benefits that applicants can expect in the first 12 months of employment

2. Internal Promotional Notification

Before making promotion decisions, employers must:

• Make reasonable efforts to announce promotional opportunities to all current employees in affected departments, and
• Include the same salary and benefits information as external postings

3. Exemptions to Consider

The law does provide some flexibility:

• Employers can still increase salary or benefits when extending actual job offers
• Promotions made on an “emergent basis” due to “unforeseen events” are exempt from notification requirements
• Promotions based solely on years of performance, experience, or service are exempt from these requirements

Potential Business Implications

While the direct penalties for non-compliance are relatively modest ($300 for first violations and $600 for subsequent violations), the indirect consequences could be more significant. The information disclosed in job postings could potentially be used by current employees to support claims under New Jersey’s Law Against Discrimination or the Diane B. Allen Equal Pay Act, which carry much steeper penalties including treble damages.

Proactive Steps for Your Business

To prepare, affected businesses should consider taking the following actions before the June 1 deadline:

1. Conduct a Pay Equity Audit: Review your current compensation structure to identify and address any disparities that could be highlighted once salary ranges become public.
2. Develop Salary Ranges: Establish and document clear salary ranges for all positions within your organization.
3. Create an Internal Promotion Protocol: Establish procedures to ensure all promotional opportunities are properly communicated to relevant employees.
4. Update Job Posting Templates: Modify your templates to include required salary ranges and benefits information.
5. Train HR Personnel: Ensure anyone involved in recruiting or promotion decisions understands the new requirements.
6. Review Multi-State Compliance: If you operate in multiple states, consider how New Jersey’s requirements interact with pay transparency laws in other jurisdictions.

How We Can Help

At Earp Cohn, we understand the challenges these new requirements present, particularly for businesses operating across state lines or those with complex compensation structures. Our team can help you develop compliant job posting templates, create internal promotion protocols, conduct pay equity audits, and manage the overlap of this new law with existing anti-discrimination and equal pay requirements.

With proper preparation, your business can meet these new transparency requirements while maintaining appropriate discretion in compensation decisions and minimizing exposure to potential claims.

Contact our office today to schedule a consultation on how these changes will impact your specific business operations.

Richard Israel is a shareholder at Earp Cohn P.C. in Cherry Hill, NJ, where he represents businesses and business owners in various legal matters. With experience as in-house counsel for both privately held and publicly traded Fortune 500 companies, Rich helps clients identify, evaluate, and minimize risks in their business operations while achieving their ultimate business objectives.