The Equal Pay Act requires employers to pay employees of different sexes the same wages for substantially equal work, keep payroll records that show how each wage rate was set, post required notices, and refrain from punishing anyone who questions their pay. It is a duty to act, not just a rule against bad motives. Employers and employees who bring compliance questions to the Law Offices of Usmaan Sleemi usually find that the federal baseline is the easy part, and that New Jersey layers on obligations most companies have never read.
What is an employer’s core obligation under the Equal Pay Act?
Pay equal wages for equal work, measured by what the job actually involves. Under the Equal Pay Act of 1963, an employer cannot pay one employee less than another of the opposite sex when the two jobs require equal skill, effort, and responsibility and are performed under similar working conditions in the same establishment.
Wages here means total compensation. Base salary, hourly rate, overtime rate, bonuses, commissions, profit sharing, stock, vacation pay, and insurance contributions all count. Compliance is not achieved by matching two base salaries while paying one person a richer commission percentage.
Can an employer close a pay gap by cutting the higher earner’s pay?
No. The statute says directly that an employer may not reduce the wage rate of any employee in order to comply. The only lawful correction is raising the underpaid employee.
This trips up companies that discover a disparity during a compensation review and try to solve it by freezing or reducing the higher salary. That approach creates a second problem instead of fixing the first, and it often produces a retaliation claim from the employee whose pay was cut.
What records must employers keep?
Employers must preserve payroll records for three years under the Fair Labor Standards Act, and supporting records such as time cards, wage-rate tables, and work schedules for two years. Equal Pay Act regulations enforced by the Equal Employment Opportunity Commission require employers to retain records that explain wage differentials between employees of different sexes.
Practically, the documents that decide these cases are the ones showing how a number was chosen: the salary approval, the job description in effect at the time, the performance rating that justified a raise, and the compensation band the role was slotted into. Employers who cannot produce that trail tend to lose, because they carry the burden of proving the pay difference was lawful.
What notices are employers required to post?
Federal law requires the EEOC’s “Know Your Rights: Workplace Discrimination is Illegal” poster and the Department of Labor’s Fair Labor Standards Act notice in a conspicuous place accessible to employees.
New Jersey adds a distribution requirement. Under the Diane B. Allen Equal Pay Act, effective July 1, 2018, employers must post the state-issued notice of employee rights to be free of gender inequity in pay and also hand it out in writing: at the time of hire, whenever an employee requests it, and annually by December 31. Posting alone does not satisfy the annual distribution piece.
Does New Jersey require employers to publish pay ranges?
Yes. New Jersey’s pay transparency law took effect June 1, 2025 and applies to employers with 10 or more employees over 20 or more calendar weeks that do business, take applications, or employ people in the state. Covered employers must include the hourly wage or salary range, and a general description of benefits and other compensation, in every posting for a new job or a transfer opportunity.
The same law requires employers to make reasonable efforts to notify current employees in the affected department about promotional opportunities before making a decision. Separately, since January 1, 2020, New Jersey employers cannot ask applicants about their salary history or use it to set pay unless the applicant volunteers it.
What does an employer have to prove to justify unequal pay?
Once an employee shows equal or substantially similar work at unequal pay, the employer must prove an exception applies. Federal law recognizes a seniority system, a merit system, a system measuring quantity or quality of production, or a factor other than sex.
New Jersey’s standard is stricter. The employer must show the difference rests on seniority, merit, or a bona fide factor such as training, education, experience, or production, and that the factor does not perpetuate a protected-class disparity, is applied reasonably, accounts for the entire difference, is job related, and rests on business necessity with no alternative practice available. New Jersey also does not offer a self-audit safe harbor the way Massachusetts does, so conducting a pay audit is prudent but does not create a defense.
What are employers forbidden from doing to workers who ask about pay?
Employers cannot retaliate against an employee for discussing, disclosing, or investigating compensation, and in New Jersey they cannot require anyone to sign a waiver of the right to discuss pay as a condition of employment. Retaliation exposure under state law includes treble damages.
Compliance comes down to documentation and consistency: know why every employee is paid what they are paid, correct gaps upward, and keep the notices current. If you are an employee whose pay does not match your work, or an employer trying to audit a compensation structure before a claim arrives, the Law Offices of Usmaan Sleemi can review the records that matter and identify exposure under both federal and New Jersey standards. Reach the firm through sleemilaw.com to arrange a confidential consultation.
