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Murphy's equal pay executive order: What does it really mean?

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Gov. Murphy's executive order can only apply to public employees.
Gov. Murphy's executive order can only apply to public employees. - ()

As his first order of business, Gov. Phil Murphy signed an executive order forbidding public employers from asking applicants about their salary histories.

The order, which details wage gender gaps for various races, aims to help close such disparities.

“You can’t search for a potential employee’s salary, and you can’t hold it against someone if you have that info,” said Kathie Caminiti, a partner at Fisher Phillips in Murray Hill who’s specialized in employment law for three decades. “We have a start-low, stay-low problem. If they’re asking what you’re current salary, they’re not really paying you for the job you’re doing. They’re perpetuating a lower salary that may have been discriminatory in itself.”

Amid a recent surge in pay-equity legislation nationwide, Fisher Phillips has created an interactive map detailing new laws. Only three states lack measures entirely, though workers have limited protections under the U.S. Equal Pay Act of 1963.

"The biggest issue was its catch-all exclusion, where you could justify pay disparities by any factor other than sex. That exception kind of swallowed the real impact of the law."

Kathie Caminiti, partner at Fisher Phillips

“There are some legal hurdles in that legislation [which] doesn't have a lot of teeth,” Caminiti said. “The biggest issue was its catch-all exclusion, where you could justify pay disparities by any factor other than sex. That exception kind of swallowed the real impact of the law.”

Caminiti cited a situation in which a male employee earned a higher wage than his female counterpart due to the need for work-related travel.

“It begs the question: Did you ask her if she would travel, or did you assume she wouldn’t because she had a young family? It’s a factor, but whether it’s a legit enough factor is more debatable,” she said.

New Jersey law stipulates an employer must justify a pay differential based on “a reasonable factor or factors other than sex.”

Caminiti
Caminiti

In some states, including New York and Nevada, pay disparities must be based on more specific factors, such as a difference in education level, experience, location or job duties.

As for Murphy’s executive order, it has the force of law, but can only cover public employees.

“It’s well-reasoned and makes good theoretical sense,” said Dana Britton, director of the Center for Women and Work at Rutgers. “But like most employment regulations, it’s dependent on people’s voluntary compliance. He only has the ability to do this for state employees and most employees are private.”

Also, with most state employee salaries listed online, preventing employers from accessing the past salaries of people already employed by the state will be difficult to enforce.

“Gov. Murphy’s executive order relates only to public employees, but he’s made it clear that he’ll sign legislation to that effect [for private employees] as soon as it hits his desk,” Caminiti said. “He considers pay equity in our state to be a key issue. It’s no accident it was his first order.”

Caminiti recommends employers audit employee wages to identify current disparities.

“Any business may find that there are pockets of disparity they want to address,” she said. “And if you do it in a ‘privileged’ fashion — as in confidential, because it’s been prepared for counsel — it enables you to address issues and avoid litigation.”

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