Editor's Note
Recruiting Internally and Pay Transparency
New Jersey's new pay transparency law requires notice of internal opportunities to existing employees. Go New Jersey!
But why does this need to the be the law? Aren't you doing that already?
Probably not. Sometimes, it's an oversight or a disconnect between departments and hiring managers. If the typical career progression in your organization is anything other than a narrow straight line up one stack in the org chart, there's probably a lot of room for opportunities to fall through the cracks.
Current employees are not stalking opportunity on the company's career site and they shouldn't have to. First, why would they? If they hate their job and are looking for a new one, it's probably not with you. If they love their job, they probably aren't looking either; they're busy working.
But there are lots of great reasons to recruit internally.
- Cost - you won't have to pay for onboarding, the administrative time to do all the paperwork and benefits, or the time for people to get up to speed. Current employees already know the culture, the technology, and maybe even who to ask when they have questions in the new role.
- Retention - Tenure plus great employees is the secret sauce of getting stuff done and improving the chances that it gets done on time, in budget, and done well.
- Trust - When managers look out for their reports and encourage them to put their name in for new roles (both inside and outside their department), it sends a strong message that the organization sees the employee and their skills and talents, values the employee and their work, and wants them to succeed. It shows the employer cares. What could be better than that?
I'm sure my many recruiter friends have thoughts and advice on this too, especially on how to make this new law your best friend and a great reason to support the careers of existing employees in ways that benefit everyone. Recruiting internally is good business.
- Heather Bussing
Starting June 1, 2025, employers with ten or more employees within the State of New Jersey will be required to include pay ranges in job postings and provide notice of promotional opportunities to current employees.
Pay Transparency Requirements
The new law requires covered employers to include in each job posting the hourly wage or salary, or a range of the hourly wage or salary, for the advertised position. Employers must also include a general description of all benefits and other compensation programs for which the selected candidate would be eligible. This requirement applies to any posting for new jobs and transfer opportunities advertised by the employer either externally or internally.
The law specifies that this requirement does not prohibit an employer from offering an applicant higher wages, benefits, and other compensation than was identified in the job posting.
Internal Announcement Requirements
The law also requires covered employers to “make reasonable efforts to announce, post, or otherwise make known opportunities for promotion that are advertised internally within the employer or externally on internet-based advertisements, postings, printed flyers, or other similar advertisements to all current employees in the affected department or departments of the employer’s business prior to making a promotion decision.” The law defines a promotion as “a change in job title and an increase in compensation.”
This requirement does not apply to promotions for current employees awarded on the basis of years of experience or performance. Further, the law does not preclude employers from making a promotion “on an emergent basis due to an unforeseen event.” Under such circumstances, no notice to current employees is required before making the promotion decision.
Covered Employers
The requirements will apply to New Jersey employers with ten or more employees over 20 calendar weeks that do business, employ workers, or take applications for employment within the State of New Jersey. Job placement and referral agencies are expressly included under the law’s definition of “employer.” However, the law does not specify whether the ten-employee minimum includes employees located outside of New Jersey.
Temporary help service firms and consulting firms registered with the Division of Consumer Affairs in the Department of Law and Public Safety are required to provide pay and benefit information to an applicant for temporary employment during the interview or when they are hired for a specific job opening. These entities are not, however, required to provide this information in a job posting meant to identify qualified applicants for potential future job openings.
Enforcement
The New Jersey Department of Labor and Workforce Development may enforce the provisions of this law by seeking civil penalties of $300 for the first violation and up to $600 for each subsequent violation. The law does not provide for a private right of action by an applicant or employee.
Recommended Next Steps
Covered employers should review and, if necessary, update job posting templates and procedures, to ensure compliance with the new requirements. Employers should also consider contacting recruiters or other third parties who post job opportunities on their behalf to ensure they are also aware of the new law and what it requires.
In addition, employers should evaluate their processes for advertising promotional opportunities internally to ensure each department complies with the requirement to notify employees of promotional opportunities within their department.
Now may also be a good time for employers to consider a pay equity audit to assess whether their current pay practices are compliant with all applicable equal pay laws.
