New Jersey’s New Compensation Disclosure Law: A Step Towards Transparency, New Jersey Law Journal, by Erik Sardiña, Esq., published 3-31-2025

Kaufman Dolowich’s Erik Sardiña weighs in on New Jersey’s new compensation disclosure law in the New Jersey Law Journal article, “New Jersey’s New Compensation Disclosure Law: A Step Towards Transparency.” 

Please see the full article below:

Previously, New Jersey employers were prohibited from preventing employees from discussing wages. Now, covered employers must affirmatively disclose compensation to potential applicants.

By Erik Sardiña, Kaufman Dolowich LLP

March 31, 2025

On Nov. 18, 2024, New Jersey became the latest state to require pay transparency in job advertisements by passing a new compensation disclosure law. Set to take effect on June 1, 2025, this law will require covered employers to disclose information regarding compensation and benefits to prospective employees. Previously, New Jersey employers were prohibited from preventing employees from discussing wages. Now, covered employers must affirmatively disclose compensation to potential applicants. New Jersey employers should familiarize themselves with the new disclosure law to determine if they are covered and ensure new job postings comply. Employers should also prepare for the impact that new disclosures have on current employees, by reviewing any current compensation for pay gaps and training managers and HR teams to comply with the new law.

Key Requirements of the Law

The new pay transparency act (P.L.2024, c.91) mandates that all covered employers must make “reasonable efforts” to disclose specific information in each job posting. This includes:

1. External Job Postings and Internal Opportunities: The new law applies to promotions, new jobs, and transfer opportunities. The law applies to both print and internet-based postings.
2. Hourly Wage or Salary Disclosure: Employers must provide either the exact hourly wage or salary or a range of the hourly wage or salary for the position being advertised.
3. Benefits and Compensation Programs: In addition to salary information, employers are required to list the benefits and other compensation programs that the employee would be eligible. This may include health insurance, retirement plans, bonuses and other perks.
4. Coverage: The law applies to any person, company, corporation, firm, labor organization or association with 10 or more employees that “does business, employs persons, or takes applications for employment” within New Jersey. This broad definition ensures that a wide range of employers, from small businesses to larger corporations, are required to comply with the disclosure obligations in their hiring practices, including employers primarily based outside New Jersey.
5. Exclusions: The law specifically excludes:
• Employers who do not employ more than nine employees,
• Promotions of a current employee based on years of experience or promotions based on emergent basis due to unforeseen events,
• Increasing compensation beyond what is identified in any job posting when making an offer for employment to an applicant, and
• Temporary employment agencies and consulting firms registered with the New Jersey’s Department of Consumer Affairs that are posting to identifying qualified applicants for future job openings and not existing job openings. (Those employers will need to provide pay and benefits information during the interview or hiring for a specific job opening).

Penalties

Under New Jersey’s new compensation disclosure law, employers who violate the provisions of the law may face civil penalties of $300 for first violation and $600 for each subsequent violation. The law currently does not incorporate a private right of action, instead limiting enforcement to the New Jersey Department of Labor and Workforce Development.

Implications of the Law

The enactment of this law has widespread implications for both employers and job seekers. For employers, it may require a reevaluation of current job posting practices and compensation structures. Companies will need to ensure that they are compliant with the new regulations, which may involve training HR personnel and updating internal policies. With the new pay transparency requirements effective June 1, 2025, covered employers should also consider the impact that public disclosure of wage and salary offerings will have on their current respective workforces. Employers should evaluate their current compensation to ensure competitive salary ranges, retention of successful team members, and limited pay gap disparities that could run afoul of other laws such as New Jersey’s Equal Pay Act, N.J.S.A. 10:5-12(t), which bars employers from paying less for doing the same job to employees in a protected class.

For job seekers, the new law provides clear information on compensation and benefits upfront to better assess job opportunities and make informed decisions about their career paths.

Comparisons to Other States and Cities

New Jersey’s new law joins a growing trend across the United States, where various states and cities have implemented similar compensation disclosure requirements. For instance:

• Jersey City: In 2022, Jersey City, New Jersey, implemented a similar pay disclosure law which imposed pay and benefit disclosure obligations in job postings for employers in Jersey City with five or more staff members (employees or independent contractors).
• New York City: In 2022, New York City enacted a law requiring employers to disclose salary ranges in job postings. The law aims to combat wage discrimination and promote equitable pay practices, similar to the intentions behind New Jersey’s legislation.
• California: California established salary disclosure laws in 2018, requiring employers to provide salary ranges to employees upon request. In 2022, California expanded its requirements to include job postings, mandating that all employers disclose salary ranges in their advertisements.
• Colorado: Colorado’s Equal Pay for Equal Work Act, effective Jan. 1, 2021, requires employers to include salary ranges and benefits in job postings. The law aims to ensure transparency and combat pay disparities based on gender and other factors.
• Washington State: Washington has also implemented laws requiring employers to disclose salary ranges and benefits in job postings.

Conclusions

New Jersey’s new compensation disclosure law adds significant obligations on employers both in New Jersey and outside New Jersey in disclosing compensation and pay transparency in the workplace. By requiring employers to disclose essential compensation information in job postings, the law requires employers to reevaluate their hiring and promotion practices while providing job seekers and employees with more information in making decisions related to their careers. As more states and cities adopt similar measures, the push for transparency in compensation continues to gain momentum. Given the ongoing practice of remote hiring, the implications of this law will likely resonate far beyond the Garden State.

Erik Sardiña is a business litigation partner in the Hackensack office of Kaufman Dolowich LLP, serving as general outside counsel handing complex commercial matters. He advises business clients throughout a myriad industries litigating and resolving business and corporate conflicts, directors and officers liability, and advising companies and executives on general legal issues, corporate governance, FDA, FTC, USDA, CBP compliance, labor and employment issues, environmental issues, securities, operations, data retention, insurance and overall risk management. He can be reached at esardina@kaufmandolowich.com.

Reprinted with permission from the March 31, 2025 edition of “New Jersey Law Journal” © 2025 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.