Summary
- New Jersey’s Pay Transparency Act will be in effect by June 1, 2025.
- Employees will be required to disclose pay ranges and benefits new hires can expect to receive within 12 months of employment..
- Payroll software is crucial to ensuring that publicized salary ranges match what employees are being paid.
New Jersey joins a growing list of states that have implemented pay transparency laws, including New York, California, and Colorado. Starting June 1, 2025, the Pay Transparency Act will require covered employees to include pay information and benefits data in job postings, both for new roles and internal opportunities.
The act is designed to improve pay equity by making compensation more transparent to job seekers and employees alike.
Who’s covered?
The law applies to employers who meet the following criteria:
- Have 10 or more employees over 20 calendar weeks
- Conduct business in New Jersey
- Employ workers in New Jersey
- Accepts applications for employment in New Jersey
What must be disclosed?
Employers must disclose:
- The hourly wage, salary, or pay range
- A description of the benefits an employee can expect to receive in the first 12 months
These conditions apply to external job postings, internal promotions, and transfer opportunities. Employers must disclose any opportunities for promotion to all current staff in the affected department. However, promotions resulting from “unforeseen events” or based on years of service or performance are exempt from the notice requirement.
What happens if you don’t comply?
Employers who fail to comply can be subject to a penalty of $300 for first-time violations and up to $600 for subsequent violations.
What the new law means for payroll teams and how New Jersey businesses can adapt
Compliance with this new regulation has a lot to do with policy changes, and it’s easy to think that this is more of HR’s domain. However, once salary bands are made public, payroll teams must ensure that those numbers align with actual compensation data.
Here are some practical tips to help payroll teams prepare:
Standardize pay rates across locations
If you’re hiring across state lines, you must ensure that each job post meets corresponding pay disclosure requirements in every state.
Businesses operating in multiple locations often face challenges with standardizing job titles and pay rates. With Workforce.com, you can set pay rates for different roles or locations, which helps avoid any inconsistency between what’s posted on job listings and what’s paid.
Align job postings with actual pay data
To comply with laws like this, job postings must be audited against internal pay data. But this is easier said than done when compensation information is scattered across different spreadsheets or platforms.
With Workforce.com, all your pay and role information lives in one system, making it easy to review, audit, and generate realistic pay ranges.
For instance, instead of posting a vague range of $15-$25/hour, Workforce.com can help you determine the median pay rate for the role across locations, which will help you set a more realistic pay band.
In states that already have pay transparency laws, some businesses have received criticism for posting an overly broad range (e.g. $40,000-$120,000), which feels less like transparency and more like an attempt to skirt the law. If you’re serious about compliance and attracting the right people, realistic ranges matter.
Audit job titles across roles
Payroll teams should look for pay disparities between employees with similar roles. If two people are doing the same work but receiving different pay, it’s important to understand why.
Again, addressing these gaps is a matter of having the right data. Workforce.com houses employee records and pay rate history, which enables you to quickly identify inconsistencies among job titles and their pay. Managers can filter reports by job title and location to check whether employees with similar roles are paid within the same pay range.
Maintain clean payroll records
Keeping payroll records organized is a huge part of complying with different labor laws, including pay transparency requirements. Workforce.com keeps this information organized because it unifies time tracking, scheduling, and payroll. Ultimately, it creates a clean audit trail that connects job titles, hours worked, and pay rates. Having that information organized can help with compliance, especially if state regulators and employees ask for proof.
Invest in a good payroll system
Payroll is too complex to manage manually or with outdated tools. More than processing paychecks, a good payroll system centralizes your data such as pay rates, job roles, and other relevant information that can be crucial to compliance.
Workforce.com was built to simplify this. It brings payroll and HR together, giving you a clearer view of your team and helping you stay compliant with new regulations.
Simplify compliance with Workforce.com
Pay transparency is both an HR and payroll challenge. With New Jersey’s law taking effect, it’s high time to ensure job postings align with what employees are actually paid. Workforce.com has the tools to help audit pay data, standardize pay rates across locations, and make payroll reports—all to help you stay compliant.
See how Workforce.com makes payroll transparency easy for hourly teams. Book a demo today.