On Monday, December 19, 2016, the New Jersey State Legislature postponed its vote to override the Governor’s veto of Senate Bill No. 992, also known as the New Jersey Pay Equity Act.  The Act was passed earlier this year by both the New Jersey Senate and Assembly, but vetoed by Governor Christie.

The Act provides that it will be an unlawful employment practice, or unlawful discrimination, for any employer to pay any of its employees at a rate of compensation, including benefits, which is less than the rate paid to employees of the other sex for substantially similar work.  An employer may pay a different rate of compensation only if the employer demonstrates that the differential is made pursuant to a seniority system, a merit system, or the employer demonstrates:

1. That the differential is based on one or more legitimate, bona fide factors other than sex, such as training, education or experience, or the quantity or quality of production;

2. That the factor or factors do not perpetuate a sex-based differential in compensation;

3. That each of the factors is applied reasonably;

4. That one or more of the factors account for the entire wage differential; and

5. That the factors are job-related with respect to the position in question and based on a legitimate business necessity. A factor based on business necessity does not apply if it is demonstrated that there are alternative business practices that would serve the same business purpose without producing the wage differential.

See S. 992, 217th Leg. (NJ 2016).

Governor Christie vetoed the bill on May 2, 2016, stating that the remedial measures called for were too broad.  He recommended that the bill mirror the provisions of the Lilly Ledbetter Act to limit back pay to two years.  The bill also contained language that would allow for treble damages.  Christie recommended that the bill be amended to remove that provision “to remain consistent with well-settled State and federal law.”

In addition, Christie stated that the bill, in its current form, would eliminate any consideration of whether employees’ work was equal and whether they undergo similar working conditions.  He called this “nonsensical” and stated that it would make New Jersey “very business unfriendly.”  Christie also asked legislators to remove a provision that would have required employers that contract with the State to regularly report on their demographics and the pay of each employee involved in a contract.  Christie referred to that provision as “outrageous bureaucratic red tape creation.” Links to the pay equity bill and the Governor’s statement regarding his action on the bill are available at: S-992; Governor’s Statement re S-992.

In New Jersey, a vetoed bill may still become law if the Legislature overrides the veto by a 2/3 vote.  The override vote was scheduled for Monday, December 19, 2016, but was ultimately postponed as state lawmakers discussed possible alternatives or compromise.  We will continue to provide updates regarding the status of New Jersey’s Pay Equity Act as they become available.