New Jersey recently announced new regulations under the state’s Law Against Discrimination (LAD), described by its Attorney General as the most comprehensive state-level disparate impact rules in the country. This update follows President Trump’s executive order, Restoring Equality of Opportunity and Meritocracy, which directs federal agencies to eliminate disparate-impact liability for employers. While the federal government moves to limit this theory of liability, New Jersey is reinforcing it as a cornerstone of civil rights protections.
The state’s Division on Civil Rights (DCR) has established a framework for evaluating policies that may disproportionately affect protected groups, even when those policies appear neutral. The rules apply across housing, lending, employment, public accommodations, and contracting. They require entities to show that any policy with adverse impact serves a substantial, legitimate purpose and that no less discriminatory alternative is available. Protected characteristics include race, national origin, religion, gender identity, disability, sexual orientation, and others. DCR has also published responses to public comments, providing additional clarification on how these rules will be applied.
The regulations also address technology-driven practices. Automated decision tools, such as resume-screening algorithms or scheduling filters, are subject to the same standards as human-driven processes. Organizations using third-party systems must take reasonable steps to ensure compliance, but liability remains if those tools result in unlawful impact. These measures form part of New Jersey’s Civil Rights and Technology Initiative, signaling increased oversight of algorithmic decision-making.