Most employment claims against New Jersey and Pennsylvania employers are traceable to a document that was never written, a policy that was never updated, or a decision that was made before anyone checked. The cost difference between fixing those things in advance and litigating them afterward is substantial, and it falls hardest on employers in the 25 to 500 employee range, who carry the same statutory obligations as national companies without in-house counsel or a compliance department to manage them.
Stark & Stark’s Employment and Labor Law Group works with employers to reduce that exposure before a claim is filed. That means auditing what you already have, rewriting what will not hold up, training the managers who make the decisions that get challenged, and being available for the call that comes before a termination rather than after a complaint.
Preventive work is separate from defense. It is the set of documents, policies, and practices that determine whether a dispute becomes a lawsuit and, if it does, whether your file supports your position. In practice it covers:
Employers rarely have the appetite to address everything at once. Sequenced by the ratio of statutory exposure to cost of correction, the order that usually makes sense is:
Both states reach smaller employers than federal law does. The New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq., applies to essentially all employers regardless of headcount, and the Pennsylvania Human Relations Act defines a covered employer as any person employing four or more persons within the Commonwealth. An employer with a dozen employees who assumes Title VII’s 15-employee threshold governs is already wrong in both states.
Pennsylvania employers should also note the state’s CROWN Act, House Bill 439, which the Pennsylvania Human Relations Commission confirms amends the PHRA so that race includes traits associated with race, including hair texture and protective hairstyles. Governor Shapiro signed it on November 25, 2025, and the enacted text provides that the act takes effect in 60 days, which places the effective date in late January 2026. Appearance and grooming policies should be reviewed for whether they are adopted for nondiscriminatory reasons, tailored to the specific job, and applied consistently. Generalized professional appearance language is the kind of provision that now needs a second look.
New Jersey’s Conscientious Employee Protection Act, N.J.S.A. 34:19-1 et seq., carries a one-year limitations period and a procedural feature many employers do not use to their advantage. For disclosures to an outside public body, the statute generally requires that the employee first raise the issue in writing with a supervisor and give the employer a reasonable chance to correct it, subject to exceptions, under N.J.S.A. 34:19-4.
That mechanism only works if your internal reporting channel actually captures written concerns and routes them somewhere. Two related obligations get missed regularly: designating and publishing a contact person to receive those notifications, and distributing the CEPA notice annually rather than only posting it. The NJDOL notice states that employers with 10 or more employees must distribute notice of the law to employees once each year.
New Jersey’s Wage Theft Act added liquidated damages, a six-year lookback, employer notice duties, joint liability between client-employers and labor contractors, and criminal exposure. Liquidated damages are not automatic on a first violation where the employer shows the failure to pay was an inadvertent error made in good faith, that it had reasonable grounds for believing it was not a violation, and that it paid the wages due within 30 days of notice, per the statutory text. That defense is a practical argument for documenting the basis of classification decisions at the time you make them.
One recent development worth a payroll review: the New Jersey Supreme Court held in Musker v. Suuchi, Inc. that a commission paid for an employee’s labor or services is a wage under the Wage Payment Law and cannot be excluded as a supplementary incentive. The Court found this true whether the commissions were calculated on gross or net revenue, and held that the employee’s receipt of a base salary did not convert her commissions into supplementary incentives. Commission plans written on the older assumption should be revisited.
Pennsylvania’s Wage Payment and Collection Law, 43 P.S. § 260.1 et seq., imposes its own set of mechanical duties: designate paydays in advance, notify employees at hiring of the time and place of payment, the rate of pay, and the amount of any fringe benefits, and keep the lapse between the end of a pay period and payday within contractual, customary, or 15-day limits. Remedies include liquidated damages of 25 percent of unpaid wages or $500, whichever is greater, where wages remain unpaid 30 days past the scheduled payday, plus costs and attorney’s fees, according to the Department of Labor and Industry summary. Note that the summary itself states it does not carry the force of law.
New Jersey adopted final regulations at N.J.A.C. 12:11 governing the ABC test for independent contractor status, with the test applying across the Wage and Hour Law, Wage Payment Law, Unemployment Compensation Law, Temporary Disability Benefits Law, and Earned Sick Leave Law. The Department of Labor and Workforce Development notice of adoption sets an operative date of October 1, 2026. Background on the rulemaking is available in the Department’s announcement of the proposed rules.
A worker is presumed to be an employee unless the business establishes all three prongs. Two details in the final rules matter for how you document relationships:
Any business relying on a contractor population has a defined window to review those arrangements before the regulations take effect. There is also legislative pushback pending, so the regulatory picture may continue to move.
New Jersey’s Pay and Benefit Transparency Act took effect June 1, 2025 and applies to employers with 10 or more employees over 20 or more calendar weeks that do business, employ people, or take employment applications in New Jersey. Out-of-state employers are covered if they have even one New Jersey employee or accept applications from New Jersey residents for remote work performed in the state. Every internal or external posting for a new job or a transfer opportunity must disclose a wage or salary or a range, a general description of benefits, and other compensation programs, per NJDOL guidance.
Ranges need both a floor and a ceiling. Postings reading “up to $35 per hour” or “$70,000 and up” do not comply. Penalties run to $300 for a first violation and $600 for each subsequent one, under the enacted law, P.L. 2024, c.91. Failure to disclose across all postings for a single job opening counts as one violation regardless of how many forums carried it. There is a separate obligation to make reasonable efforts to notify current employees in affected departments about promotion opportunities, which is the requirement employers most often overlook because it lives outside the recruiting workflow.
Pennsylvania has no statewide pay transparency law or salary history ban, so compliance is driven by local ordinances. Philadelphia’s Wage Equity Ordinance prohibits inquiring about or relying on an applicant’s salary history, and has been enforceable since 2020, per the City of Philadelphia. A Pennsylvania employer with multiple locations needs a site-by-site overlay rather than one statewide policy.
Under Woolley v. Hoffmann-La Roche, 99 N.J. 284 (1985), absent a clear and prominent disclaimer, an implied promise in an employment manual that an employee will be fired only for cause may be enforceable. A New Jersey handbook that describes progressive discipline without a conspicuous, plainly worded at-will disclaimer can create contract exposure out of a document intended to reduce risk.
Pennsylvania starts from an at-will presumption that a plaintiff must overcome by showing an express contract, an implied contract supported by additional consideration, or a public policy exception. Handbook-as-contract arguments have had mixed results, which is a reason for care in how policies are worded rather than a reason to relax.
A yearly review is the right cadence for most employers, with an off-cycle review whenever headcount crosses a statutory threshold, a new location opens in another jurisdiction, or a significant policy change takes effect.
A written anti-harassment policy, a complaint channel that does not route exclusively through the employee’s own supervisor, and documented manager training are what allow an employer to argue it took reasonable preventive steps. Pennsylvania employers have an additional reason to move now: House Bill 1825 passed the Pennsylvania House by a vote of 110 to 93 on December 16, 2025 and moved to the Senate. Under the bill, the Pennsylvania Human Relations Commission would develop model anti-harassment and anti-discrimination policies and procedures that employers could adopt to comply, published and updated as state and federal law changes, according to the Pennsylvania House of Representatives. Employers who already maintain a written policy and a working complaint channel are positioned for that framework rather than reacting to it.
New Jersey enacted N.J.S.A. 10:5-12.7, which declares against public policy any employment contract provision waiving substantive or procedural rights relating to a discrimination, retaliation, or harassment claim. The Appellate Division has held that provision preempted by the Federal Arbitration Act as applied to arbitration agreements, in Antonucci v. Curvature Newco, Inc., 470 N.J. Super. 553 (App. Div. 2022).
Enforceability still turns on ordinary formation questions: notice, assent, and whether the employer can prove the employee agreed to the clause it seeks to enforce. That is where these agreements fail in practice, not on the statutory question. Separate federal limits apply to pre-dispute arbitration of sexual harassment and sexual assault claims, which should be confirmed against current law before any arbitration provision is rolled out.
New Jersey has no general non-compete statute for the ordinary workforce. Enforceability runs through the common law reasonableness test drawn from Solari Industries v. Malady and Whitmyer Bros. v. Doyle: the covenant must protect a legitimate employer interest, impose no undue hardship on the employee, and not injure the public. Pennsylvania applies the framework from Hess v. Gebhard & Co., 570 Pa. 148 (2002), requiring that the restriction be incident to an employment relationship, reasonably necessary to protect the employer, and reasonably limited in duration and geography. Hess also holds that a non-compete is not assignable to a purchasing entity without a specific assignability provision, which is a recurring problem in asset deals.
Two practical points. In Pennsylvania, a non-compete presented to an existing employee generally requires new consideration beyond continued employment. And at the federal level there is no non-compete ban: the FTC’s rule never took effect and was removed from the Code of Federal Regulations by Federal Register notice published February 12, 2026. State law controls.
New Jersey employers should still avoid building their protection strategy on non-competes alone. Legislation that would sharply restrict non-competes and void no-poach agreements has been introduced repeatedly, most recently as Senate Bill 4385 and its Assembly companion, and is expected to return in the current session. Confidentiality agreements, narrowly drawn customer non-solicitation provisions, invention assignment, trade secret handling protocols, and a real offboarding process all survive a non-compete ban. Weighting your agreements toward those tools is the more durable position.
Releases covering age claims must satisfy the federal consideration and revocation periods to be effective. In New Jersey there is a further constraint: N.J.S.A. 10:5-12.8 renders unenforceable any provision in an employment contract or settlement agreement that conceals the details of a discrimination, retaliation, or harassment claim, and in Savage v. Township of Neptune, 257 N.J. 204 (2024), the New Jersey Supreme Court held a non-disparagement provision unenforceable to the extent it had the purpose or effect of concealing such details. Template confidentiality and non-disparagement clauses carried over from older agreements are a live risk in any New Jersey separation involving those claims.
A wage and hour audit examines exempt classifications against actual duties rather than job titles, independent contractor relationships, timekeeping and rounding practices, meal and rest break handling, off-the-clock work risk, bonus and commission treatment in the regular rate, recordkeeping, and the wage notices you are required to give employees. The output is a prioritized list separating items that need immediate correction from those that can be scheduled.
With the ABC test regulations taking effect October 1, 2026, employers using contractors have a defined period to review those relationships, revise agreements, and convert positions where the classification will not hold. Reviewing this after the effective date means correcting exposure that has already begun to accrue.
A pay equity review compares compensation across comparable roles to identify disparities that correlate with protected characteristics, and examines the pay-setting practices that produce them: starting pay decisions, raise and promotion processes, and the use of prior salary as an input. Sequencing and privilege structure matter here, because an unstructured review can create discoverable material about a problem you have not yet fixed. This work should be scoped with counsel before any data is pulled.
If you are unsure which of these reviews you need, a short conversation is usually enough to narrow it. Contact Stark & Stark or call 800.535.3425 to discuss your current practices with an employment attorney.
Most claims trace back to a first-line decision: how a complaint was received, how a performance conversation was documented, how an accommodation request was answered, how a termination was delivered. Training that changes outcomes is specific to your policies and your documentation practices, not generic. Useful coverage includes recognizing and escalating complaints, the fact that raising a concern is itself protected activity, handling accommodation requests as an interactive process, writing performance documentation that will read fairly to a third party, and knowing which decisions require a call to counsel first.
An investigation serves two purposes: resolving what happened, and producing a record that supports the employer’s decision afterward. Common failures include using an investigator with a reporting relationship to the subject, leaving the scope undefined, not documenting contemporaneously, failing to reach a conclusion, and neglecting to close the loop with the complainant. We conduct and supervise investigations, and train internal HR staff to handle routine matters so that outside involvement is reserved for the situations that warrant it.
Reduction in force planning turns on selection criteria that can be articulated and applied consistently, an adverse impact review of the proposed group by age and other protected characteristics before notices go out, releases that satisfy the applicable federal requirements for age claims, notice obligations where thresholds are met, and consistency between stated selection criteria and the documentation in individual files. The review has to happen before decisions are communicated, because the value of the analysis is the ability to adjust the group.
New Jersey has taken a clear position. In January 2025 the Attorney General and the Division on Civil Rights issued guidance on algorithmic discrimination under the LAD, stating that the LAD reaches discrimination arising from the design, training, and deployment of automated decision-making tools, including generative AI and machine learning systems. An employer can face liability where a third party built the tool, where the employer does not understand how it works, and where there was no intent to discriminate. Disparate treatment, disparate impact, and failure to accommodate theories all apply. Whether the employer bias-tested the tool or considered less discriminatory alternatives is treated as relevant evidence.
The guidance states that it imposes no requirements beyond those already in the LAD. Separately, the Division on Civil Rights has advanced rules addressing disparate impact discrimination under the LAD, including substantial changes upon adoption published at 56 N.J.R. 2218(a). Current status is tracked on the Division’s regulations page. The practical takeaway for any employer using resume screening software, video interview scoring, or automated assessments is that vendor assurances are not a defense, and the diligence you can document about testing and alternatives is what matters later.
For employers who want a full picture before deciding what to fix, the review runs in five steps:
Much of the value in preventive work is availability at the moment a decision is being made. Employers use us for the short call before a termination, an accommodation request that does not fit the usual pattern, a resignation by someone with customer relationships, or a complaint that may need a formal investigation. These conversations are shorter and less expensive than the alternative.
We need your current documents, an accurate headcount by location, and candor about how decisions are handled in practice. What you get back is a written findings memo, revised documents, and a sequence for addressing what remains, scoped so that it can be completed in stages rather than all at once.
Preventive counseling sits alongside the firm’s broader employment law practice, which includes litigation defense, internal investigations, executive compensation, restrictive covenant and trade secret disputes, and shareholder and partner disputes. When a claim does arrive despite preventive work, the same group handles the defense with existing knowledge of your policies and documentation.
Annually as a baseline, plus an off-cycle review when headcount crosses a statutory threshold, you open a location in a new jurisdiction, or a significant law takes effect. Both New Jersey and Pennsylvania have had changes in each of the last several years that affect handbook language.
A written policy is a strong practice rather than a universal statutory mandate. House Bill 1825, which passed the Pennsylvania House in December 2025 and is pending in the Senate, would have the Pennsylvania Human Relations Commission publish model anti-harassment and anti-discrimination policies employers could adopt. Having a written policy and a working complaint channel already in place is the better position either way.
Yes. The New Jersey Law Against Discrimination applies to essentially all employers regardless of size, and the Pennsylvania Human Relations Act applies at four or more employees. Title VII’s 15-employee threshold is not the operative number in either state.
It depends on whether it protects a legitimate employer interest, avoids undue hardship on the employee, and does not injure the public, and courts may narrow an overbroad covenant rather than void it. Because legislation restricting non-competes has repeatedly advanced in New Jersey, we generally recommend shifting weight toward confidentiality and non-solicitation provisions that would survive a ban.
Exposure can include unpaid wages and overtime, unemployment and disability contributions, sick leave entitlements, penalties, and liquidated damages, with New Jersey’s Wage Theft Act allowing up to 200 percent liquidated damages and a six-year lookback. New regulations governing the ABC test take effect October 1, 2026, which makes this the right time to review contractor relationships.
If you have 10 or more employees over 20 or more calendar weeks and do business, employ people, or take applications in New Jersey, yes. Postings must include a wage or salary or a range with both a floor and a ceiling, plus a general description of benefits. Pennsylvania has no statewide requirement, but local ordinances may apply.
In New Jersey, not to conceal the details of a discrimination, retaliation, or harassment claim. N.J.S.A. 10:5-12.8 and the New Jersey Supreme Court’s decision in Savage v. Township of Neptune limit those provisions. Older templates carried forward without review are a common source of unenforceable clauses.
New Jersey’s guidance on algorithmic discrimination states that an employer may be liable under the LAD even where a third party developed the tool, where the employer does not understand its inner workings, and where there was no intent to discriminate. Documented bias testing and consideration of less discriminatory alternatives are treated as relevant evidence.
It depends on headcount, number of locations, and how complete your existing documentation is. We scope it after seeing what you have, and structure remediation in phases so the work fits a budget cycle rather than arriving as a single project.
If you are reviewing your handbook, weighing a contractor classification, planning a restructuring, or responding to an internal complaint, the time to involve counsel is before the decision is final. Stark & Stark represents employers throughout New Jersey and Pennsylvania, with offices in Hamilton, Marlton, Edison, Iselin, and Bridgeton, New Jersey, and in Newtown and Philadelphia, Pennsylvania. Contact us or call 800.535.3425 to speak with an employment attorney about your workplace practices.
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