Labor & Employment

New Jersey’s Pay Transparency Law Requires Employers to Put Their Compensation Cards on the Table in Job Ads and Promotion Opportunities

By Barry M. Capp

2025 saw New Jersey join an ever-increasing number of states and localities that have passed laws and ordinances requiring employers to put their compensation cards on the table when posting job or internal promotion opportunities. The New Jersey Pay and Benefit Transparency Act (PTA), which took effect on June 1, 2025, ended the era in which employers in the state were generally free to disclose as little or as much as they wished to about a position’s responsibilities, pay, and benefits (false and misleading information or prohibited discriminatory hiring criteria aside). Now, businesses must tread very carefully when crafting job ads, postings, and announcements or risk financial and reputational damage. 

As New Jersey employers (and out-of-state employers hiring or employing workers in the state) look ahead to their workforce needs in 2026, here is what they need to know when putting the word out about opportunities and positions.

Who Must Comply With Pay Transparency Requirements?

The PTA applies broadly to employers with 10 or more employees over 20 calendar weeks who do business, employ persons, or take applications for employment within the state of New Jersey. Critically, the state Department of Labor’s proposed regulations clarify that the 10-employee threshold applies to all employees, regardless of their location, not just those working within the state. This means that a California-based company with 15 employees nationwide, but only one in New Jersey, must comply with the PTA.

The reach of the law extends beyond traditional employers. Job placement agencies, referral agencies, and employment agencies also fall under the PTA’s requirements, whether they operate in-person or virtually. Public sector employers, including state, county, and local government bodies, are also covered. Even out-of-state employers that contract with or sell to New Jersey businesses, or those that accept applications from New Jersey residents for remote positions, may be subject to compliance obligations.

What Employers Must Disclose in Job Postings

For any position advertised internally or externally, covered employers must include three key elements in job postings:

• The hourly wage or salary, or a range for compensation. While the PTA doesn’t specify how wide a range may be, proposed regulations suggest that spreads exceeding 60 percent between minimum and maximum may face scrutiny. 
• A general description of benefits. This requirement sets New Jersey apart from some other pay transparency jurisdictions. While the law doesn’t define what constitutes a sufficient description, employers can minimize risks by including information about health insurance, retirement plans, paid time off, parental leave, bonuses, and equity or profit-sharing programs where applicable.
• Any other compensation programs for which employees in the position would be eligible, such as tuition reimbursement, relocation expenses, or performance incentives.

Internal Opportunities Are Also Subject to PTA Requirements 

The PTA’s reach goes beyond the search for new employees. Employers must also make reasonable efforts to announce opportunities for promotion to all current employees in affected departments before making promotion decisions. The law defines promotion specifically as involving both a change in job title and an increase in compensation.

Two important exemptions exist. Promotions based on experience or performance do not need to be announced, allowing employers to reward high performers without navigating the notification process. Additionally, employers who need to make emergency promotions due to unforeseen events can do so without prior notice.

Non-Compliance Penalties and Risks

The New Jersey Department of Labor and Workforce Development is charged with compliance monitoring and enforcement of the PTA. The law imposes civil penalties of up to $300 for first offenses and up to $600 for subsequent violations. Notably, each non-compliant job posting or promotional opportunity constitutes only one violation, even if distributed across multiple platforms. A single job opportunity posted on a company website and LinkedIn, for example, is one violation, not two. 

While the PTA does not provide for a private right of action, it does include robust anti-retaliation protections. Employers who take adverse action against employees for discussing wages or exercising rights under the law may face exposure under New Jersey’s Law Against Discrimination and other statutes.

Compliance Tips for Employers

There are several practice steps that employers can take to ensure compliance with the PTA’s requirements. Before putting a job listing or promotional opportunity out into the world, employers should work with experienced employment counsel to: 

• Conduct a comprehensive wage and benefit audit to establish defensible compensation ranges for all positions.
• Review and revise all job posting templates to incorporate required disclosures, including internal job boards, external listings, social media posts, and any other recruitment materials.
• Ensure that third-party recruiters and employment agencies acting on their behalf understand their obligations when posting job openings.
• Develop clear procedures and editorial standards for identifying and notifying employees about promotional opportunities. Document these efforts to demonstrate good-faith compliance with the “reasonable efforts” standard.
• Educate HR teams and hiring managers on the new requirements, emphasizing both the technical disclosure obligations and the broader anti-retaliation provisions. 

Although the financial penalties for non-compliance may seem relatively inconsequential, the reputational risks and potential for related litigation should be more than sufficient incentive for employers to comply with the state’s pay transparency requirements. If you have questions about the PTA or would like assistance with a compliance audit, please contact Barry Capp at Ansell.Law.

National Non-Compete Ban May Be Dead, but Challenges to Their Validity and Enforceability Remain Very Much Alive

By Barry M. Capp

For decades, non-competition agreements that limit a former employee’s ability to work in his or her chosen field have been met with skepticism by judges and legislators in New Jersey, New York, and across the country. Courts have routinely declared void and unenforceable non-compete provisions they have deemed overly broad, while more and more states and local governments have enacted laws and ordinances that either limit the scope and use of such agreements or prohibit them outright. 

Until a few years ago, the battle over non-compete agreements was waged almost exclusively at the state and local levels. But that changed under the Biden administration, which injected the federal government into the fight. Both the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) took the position that almost all existing and future non-competition agreements were void and unenforceable. Most notably, the FTC issued a Final Rule in April 2024 that putatively established a nationwide ban on most non-competes, declaring them an “unfair method of competition” prohibited by Section 5 of the FTC Act. 

Unsurprisingly, the FTC’s ban was immediately challenged in court, with litigation resulting in dueling district court rulings as to its validity. Injunctions were entered against the Final Rule’s enforcement in some cases, while other courts held that the FTC acted within its authority when issuing the ban. The FTC subsequently appealed federal court rulings in Texas and Florida that invalidated or enjoined, respectively, the FTC’s non-compete ban.

New Administration Pulls the Plug on National Non-Compete Ban

However, after Election Day 2024 and the arrival of a new administration perceived as more friendly to businesses and hostile to regulation, the federal government’s efforts to ban non-competes nationally were soon put on life support. Now, recent moves by the newly comprised FTC have made it clear: a nationwide non-compete ban is dead.

Specifically, the FTC moved in September 2025 to dismiss its appeals of two district court decisions invalidating the Final Rule. Simultaneously, the commission took steps towards acceding to the vacatur of the non-compete ban.

Despite abandoning a nationwide non-compete ban, the FTC has also indicated, through recent enforcement actions and warning letters, that it will continue to pursue remedies against employers on a case-by-case basis for the unlawful use of post-employment non-competes that violate the FTC Act.

Such FTC efforts are nothing new; therefore, the non-compete landscape has effectively returned to its pre-ban status quo. This means employers will continue to look to applicable state legislation and jurisprudence to determine how to draft, defend, and enforce these agreements, while remaining aware of anti-competitive overreach that could attract unwanted scrutiny from the FTC.

Currently, over 30 states and numerous local jurisdictions have laws or ordinances on the books that limit the enforceability of non-compete agreements or ban them entirely. At the moment, neither New Jersey nor New York is among those jurisdictions, though the latest in a series of unsuccessful bills seeking to ban most non-competes in both states remains pending in their respective legislatures.

With the nationwide non-compete ban now dead and buried, but restrictions on and litigation about the enforceability of such agreements very much alive, this is an opportune time for employers to consult with experienced employment counsel who can review and revise any existing or contemplated non-compete provisions as necessary.

If you have questions regarding the current non-compete state-of-play or have specific concerns regarding your company’s use of non-competition agreements, please contact Barry M. Capp at Ansell.Law.

Proposed New Jersey Worker Classification Rules Could Dramatically Expand the Number of Workers Considered Employees Rather Than Contractors

By Barry M. Capp

Whether an individual is classified as an employee or an independent contractor has significant implications for businesses and workers alike. Which side of the line a worker falls on in the eyes of the law determines a whole host of respective rights and obligations, from the availability of leave, benefits, and legal protections to required contributions to government programs like unemployment compensation. Recently, the New Jersey Department of Labor & Workforce Development (NJDOL) proposed a new regulatory framework for worker classification that would place more contract workers under the employee umbrella.

Codification of the “ABC Test”

Published on May 5, 2025, the proposed new classification rules would codify the “ABC Test” that the department and the New Jersey Supreme Court have used for years to determine whether a particular worker is considered an employee or an independent contractor. The public comment period on the proposed rules, which have drawn vocal opposition from both businesses and contract workers, ended on August 5, 2025. It remains to be seen whether and when NJDOL will adopt the rules in their current form, but they could conceivably be finalized before the end of the year.

As set forth in the proposal, “The new rules would also reflect the statutory dictate… that the putative employer has the burden of proof pursuant to the ABC test to establish that the individual providing the services at issue is an independent contractor” by showing they meet “all three prongs of the ABC test–Prong A, Prong B, and Prong C.”

Prong A: Control Over Worker and Their Performance

Prong A is about how much control the employer exercises – and has the right to exercise – over the worker and the services they provide. In order for a putative employer to meet its burden under Prong A to prove a worker is a contractor and not an employee, it needs to show not only that it has not exercised control, but also that it has not reserved the right to control the individual’s performance. When evaluating under Prong A whether a worker has been, and will continue to be, free from control or direction over the performance of services, the following factors will be considered:

• Whether the individual is required to work any set hours or jobs;
• Whether the putative employer has the right to control the details and means by which the individual performs the services;
• Whether the individual must render the services personally;
• Whether the putative employer negotiates for and acquires the work performed by the individual;
• Whether the putative employer fixes the individual’s rate of pay;
• Whether the individual bears any risk of loss for the work they perform;
• Whether the individual is required to be on call, on standby, or otherwise available to perform services at set times determined by the putative employer, even if the individual does not actually perform services at such times;
• Whether the putative employer limits the individual’s performance of services for other parties, such as by limiting the individual’s geographic area or potential clientele; and
• Whether the putative employer provides training to the individual.

Prong B: Services Performed Outside Regular Course or Place of Business

Prong B considers “whether a service is either outside the usual course of business for which such service is performed” or whether “such service is performed outside of all the places of business of the enterprise for which such service is performed.” Affirmative answers would weigh in favor of contractor status.

Under the proposed rules, an employer’s “place of business” can include the residence or place of business of the putative employer’s customer, or even a vehicle. The proposal specifically uses ride-share drivers as an example, designating ride-share drivers’ vehicles as a “place of business” for the companies they drive for. “Usual course of business” includes all of an employer’s revenue-generating activities as well as its provision of goods or services. 

Prong C: Degree of Independence

Prong C involves an evaluation of whether a worker is “customarily engaged in an independently established trade, occupation, profession, or business,” in which case it would be an indication of contractor status. In making this determination, the following factors can be considered:

• The duration, strength, and viability of the individual’s business (independent of the putative employer);
• The number of customers of the individual’s business and the volume of business from each respective customer;
• The amount of remuneration the individual receives from the putative employer compared to the amount of remuneration the individual receives from others in the same industry;
• The number of employees of the individual’s business;
• The extent of the individual’s investment in their own tools, equipment, vehicles, buildings, infrastructure, and other resources; 
• Whether the individual sets their own rate of pay; and
• Whether the individual advertises, maintains a visible business location, and is available to work in the relevant market.

As noted, the proposed rules have received a less-than-warm welcome from the business and independent contractor communities, which have asserted that the proposed rules go beyond existing statutes and case law governing worker classification. As discussed in a New Jersey Monitor article, employers are concerned about what they see as an unwarranted expansion of employer-employee relationships and the potential for significant liability for misclassification of workers as contractors, while contractors have expressed displeasure at losing their independence.

Given that the fate of the proposed rules remains unclear, New Jersey employers do not yet need to review or modify their relationships with their workers. However, they should be ready for the possibility that the current structure of those relationships may need to change if the rules are adopted. 

We will monitor developments closely and provide any updates as warranted. In the interim, if you have any questions about the proposed rules or worker classification generally, please contact Barry Capp at Ansell.Law.

New Guidance Makes Clear That the Use of AI in Hiring and Employment Can Lead to Violations of New Jersey’s Law Against Discrimination

By Barry M. Capp

Sifting through a mountainous stack of resumes and cover letters, conducting tedious and time-consuming screening interviews, and then more rounds of interviews – such is the life of a company’s hiring manager and anyone else charged with finding the right candidate for an open position. It is, therefore, unsurprising that employers and third-party staffing services have rapidly adopted artificial intelligence (AI) to streamline the search and hiring process and make it more likely to lead to the right hire.

But just because an algorithm or other automated decision-making technology, rather than a human, evaluates candidates, it does not mean employers have a “get out of discrimination free” card. Discriminatory impacts and outcomes arising from using AI can run afoul of federal, state, and local laws that prohibit discrimination in hiring and employment practices. 

Proliferation of State Legislation Governing Use of AI Hiring Technologies

Concerns that AI tools and the algorithmic decision-making at their core can lead to discriminatory impacts and outcomes have led to a proliferation of laws, regulations, and ordinances focused specifically on establishing new anti-discrimination protections or applying existing ones to employers’ use of AI in hiring and employment decisions.

Illinois, Colorado, and Utah are among the jurisdictions that followed New York City’s lead in imposing new requirements and limitations on employers’ use of AI. The City’s Local Law 144 was also the model for two bills that have been proposed in New Jersey and one in New York State that establishes rules for using certain automated employment decision tools. Those bills, similar to ones introduced in 2023, have yet to become law.   

New Jersey’s Law Against Discrimination Applies to Use of AI in Hiring Practices

While the Garden State has yet to adopt legislation specifically addressing the use of AI in hiring, the state’s attorney general and Division of Civil Rights (DCR) have made it clear that the New Jersey Law Against Discrimination (LAD) prohibits “algorithmic discrimination” arising from the use of automated decision-making tools “in the same way it has long applied to other discriminatory conduct.”

In their “Guidance on Algorithmic Discrimination and the New Jersey Law Against Discrimination,” released on January 9, 2025, the attorney general and DCR cite multiple studies and discuss several ways the use of automated decision-making tools “can create classes of individuals who will be either advantaged or disadvantaged in ways that may exclude or burden them based on their protected characteristics.”

Notably, the guidance emphasizes, “[a] covered entity can violate the LAD even if it has no intent to discriminate, and even if a third-party was responsible for developing the automated decision-making tool.” Discriminatory outcomes, rather than intent, are all that matters: “When employers… use automated decision-making tools, they may violate the LAD if those tools result in disparate treatment based on a protected characteristic or if those tools have a disparate impact based on a protected characteristic.”

Similarly, according to the guidance, “LAD also prohibits algorithmic discrimination when it precludes or impedes the provision of reasonable accommodations, or of modifications to policies, procedures, or physical structures to ensure accessibility for people based on their disability, religion, pregnancy, or breastfeeding status.”

How AI Can Lead To Unlawful Employment Discrimination

As the guidance discusses, several AI touchpoints – design, training, and deployment – can lead to prohibited discriminatory impacts or outcomes in hiring: 

Bias in Design

When designing an automated decision-making tool, a developer may make decisions that can either intentionally or inadvertently skew the tool and lead to prohibited biases. Choices regarding the tool’s output, the model or algorithms it uses, and the inputs it evaluates can introduce bias into the automated decision-making tool. If the historical data used by an algorithm contains biases, the AI will replicate and perpetuate them. 

Bias in Training

Once designed, an AI tool needs to be “trained” before it can be deployed. Training involves exposing the tool to training data from which the tool learns correlations or rules. A developer can either create a new dataset to train an automated decision-making tool or refine and reformat a pre-existing dataset. The guidance explains, “[t]he training data may reflect the developer’s own biases, or it may reflect institutional and systemic inequities. The tool can become biased if the training data is skewed or unrepresentative, lacks diversity, reflects historical bias, is disconnected from the context the tool will be deployed in, is artificially generated by another automated decision-making tool, or contains errors. 

Discrimination in AI Deployment

Once deployed, an AI tool can make decisions that constitute algorithmic discrimination for many reasons. It can be used to purposefully discriminate, “for example, if the tool is used to assess members of one protected class but not another.” If an AI tool makes decisions it was not designed to assess, its deployment may amplify any bias and reflect systemic inequities that exist outside of the tool. In some instances, deployment may expose biases that were not apparent during design and testing. 

What’s Next for Employers That Use AI in Hiring

As often happens with rapid technological advances, the law governing AI’s use in hiring is playing catch-up, and employers must navigate a patchwork of evolving rules of the road that creates a host of compliance and operational challenges. The guidance strongly advises employers to take affirmative steps to protect themselves, applicants, and employees from discriminatory outcomes. Specifically:

“It is critical that employers, housing providers, places of public accommodation, and other covered entities—as well as the developers and vendors of automated decision-making tools used by these entities—carefully consider and evaluate the design and testing of automated decision-making tools before they are deployed, and carefully analyze and evaluate those tools on an ongoing basis after they are deployed. Doing so is necessary to decrease the risk of discriminatory outcomes and thereby decrease the risk of possible liability under the LAD.”

If you have questions or concerns about your company’s use of AI in hiring and employment practices, please contact Barry Capp at Ansell.Law.

Commissions Are Wages Subject to Wage Payment Law Protections, New Jersey Supreme Court Says

By Barry M. Capp and Layne A. Feldman

In a unanimous March 17, 2025, opinion, the New Jersey Supreme Court held that earned commissions are “wages,” not “supplementary incentives,” and are therefore covered by the rights and remedies of the state’s Wage Payment Law (WPL). The decision in Musker v. Suuchi means that New Jersey employers who withhold or fail to pay commissions expose themselves to significant liability under the WPL, which allows an aggrieved worker to recover not only their unpaid wages but also liquidated damages in an amount of up to two times the unpaid wages as well as attorneys’ fees and costs.

In Musker, the plaintiff was a salesperson for the defendant Suuchi, which sold software subscriptions to apparel manufacturers. The plaintiff was paid a base salary and a commission on her sales. When the COVID-19 pandemic hit, Suuchi began selling personal protective equipment (PPE) and offered its salespeople 4% commissions on those sales. The plaintiff sold $32 million worth of PPE and, as such, claimed she was entitled to $1.3 million in commissions. When Suuchi refused to pay the commissions, the plaintiff sued, alleging violations of the WPL.

The trial court dismissed the WPL claims, holding that the plaintiff’s commissions were not “wages” and, therefore, outside the WPL’s scope. The Appellate Division affirmed.

The state’s high court came to a different conclusion, reversing the appellate court and holding that “commissions” are, in fact, “wages” as defined in the WPL. The Court noted that the WPL defines “wages” as “direct monetary compensation for labor or services rendered by an employee, where the amount is determined on a time, task, piece, or commission basis.”

“Under that definition,” the Court wrote, “compensating an employee by paying a ‘commission’ for ‘labor or services’ always constitutes a wage under the WPL.”

The Court rejected the argument that the plaintiff’s commissions constituted “supplementary incentives” that are expressly excluded from the WPL. Though the WPL does not define that term, the Court found that the ordinary meaning of a “supplementary incentive” is “compensation that motivates employees to do something above and beyond their ‘labor or services.'” Thus, under the WPL, “a ‘supplementary incentive’ is not payment for ‘labor or services’ and a ‘commission’ earned ‘for labor or services rendered by an employee’ can never be a ‘supplementary incentive.'”

This definitive ruling makes it clear that withholding commissions is as much of a WPL violation as withholding wages and can be the basis of substantial liability for employers and significant recoveries for employees. If you have questions about this case or the WPL generally, please contact Barry Capp or Layne Feldman at Ansell Grimm & Aaron.