When New Jersey expanded its equal pay protections under the Diane B. Allen Equal Pay Act, many employers assumed the law created a straightforward six-year lookback period for compensation claims. But a recent Appellate Division decision shows the reality is more nuanced, and potentially more costly.  

Here’s what the court clarified, and what every New Jersey employer needs to know. 

Watch: What the Allen Act’s equal pay lookback decision means for employers

The Allen Act is prospective

But your exposure isn’t as limited as you think.

In Affrunti v. Reed Smith LLP, the Appellate Division agreed that the Allen Act applies prospectively as of July 1, 2018, the day it was enacted. 

But the court clarified that prospective application does not erase the New Jersey Law Against Discrimination’s original two-year lookback period from the date the complaint is filed under New Jersey’s Law Against Discrimination and the Wage Payment Act. 

The trial court had ruled that the plaintiff was entitled only to damages going back to the Act’s effective date through her last day of employment, which was less than six years. The Appellate Division corrected that. 

Using the normal two-year lookback period under LAD and the WPA, the court held that the plaintiff could pursue damages from December 18, 2018through December 18, 2020, the date she filed her complaint, not the shorter time period the trial court had used. 

What this means: 

• The Allen Act’s six-year lookback period applies to post-July 1, 2018 claims. 

• The two-year lookback period under the LAD and WPA still applies to wage discrimination claims that accrued prior to the Allen Act’s enactment. 

• Employers cannot rely on the Allen Act’s effective date to cut off older wage-related exposure. 

• The same lookback period used for damages also applies to the discovery of comparator employee compensation information. 

These are key compliance points, as many employers misunderstand how these timelines work. 

Pay discrimination can still reach further back than expected 

Even under prospective application, the court emphasized that exposure does not depend on the date the employer made a pay decision, but on the date the employee received the paycheck affected by that decision. 

This means: 

• Raises, bonuses, and salary decisions from years earlier may still be actionable. 

• Paychecks issued within the statutory lookback period can revive the significance of older, discriminatory decisions. 

• Employers must think in terms of ongoing pay impact, not isolated historical events. 

This is a significant reminder that pay practices need to be consistent over time. 

Common employer questions — answered simply

1. Does this make older compensation decisions automatically safe?

No. If the impact of an older decision appeared in paychecks received within the applicable lookback window, it may still form part of a claim.

2. Does intent matter?

Under the Allen Act, the focus is on whether employees performing substantially similar work are paid equally, not whether the employer intended to discriminate. 

 3. Can we still use seniority or merit systems?

Yes, but they must be consistently applied and well documented. A system “in theory only” will not protect an employer.

4. Could this open the door to nationwide pay discovery?

Potentially. The court’s reasoning suggests that plaintiffs may access wider comparator employee compensation data, unless employers can show legitimate, job-related reasons for geographic pay differences. 

Why this ruling matters now 

The Appellate Division made one message clear:  The Allen Act expands protections without eliminating prior rights under the LAD and WPA.  

Pay discrimination claims now sit within two overlapping lookback structures, depending on the timing of the pay practices and the filing of the complaint. This increases the period during which employers’ compensation decisions may be examined, and the amount of comparator data that may be reviewed. 

Employers should be prepared for broader scrutiny. 

What employers should do next 

Equal pay exposure builds over time. Decisions made years ago, such as hiring salaries, merit increases, and discretionary bonuses, still may be reflected in paychecks within the lookback period and create legal risk. 

That’s why reviewing your pay structures with experienced employment counsel is essential. 

At Rubin Employment Law, we help employers understand which past decisions may still create legal exposure, how comparator data is likely to be evaluated, and where documentation may fall short, all through our Peace of Mind Package, which provides ongoing guidance and support on employment law compliance. 

If you have questions about the Allen Act or your pay practices, call us at  973.787.8442  or email us at legaladmin@alixrubinlaw.com.

This blog is for informational purposes only. It is not offered as legal advice, nor is it intended to create an attorney-client relationship with any reader. Consult with competent local employment counsel to determine how the matters addressed here may affect you.