On December 15, 2025, New Jersey took a significant step forward in civil rights enforcement. The Division on Civil Rights (“DCR”) adopted new regulations under the N.J.A.C. 13:16, clarifying how disparate impact discrimination is evaluated under the New Jersey Law Against Discrimination (“LAD”).
These regulations do not create new categories of liability. Instead, they formalize standards long recognized by New Jersey courts and reaffirm a core principle of LAD enforcement: employment policies that disproportionately affect protected groups may be unlawful even in the absence of discriminatory intent.
Why the New Rules Matter
Under the LAD, a facially neutral policy or practice may be discriminatory if it:
- Actually or predictably results in a disparate impact on a protected class;
- Lacks a “valid business necessity” or “substantial, legitimate, nondiscriminatory interest”; and
- Could be replaced by a less discriminatory alternative that would achieve the same business objective.
Employment practices and policies may violate the LAD if they disproportionately affect members of a protected class. Consistent with N.J.A.C. 13:16-2.2, such practices are prohibited unless the employer can demonstrate that the policy is necessary to serve a substantial, legitimate, and nondiscriminatory purpose that it is job-related and consistent with a legitimate business necessity. A policy or practice which meets this standard may still violate the LAD if a complainant can show that the same objective could be achieved through a less discriminatory alternative.
In this respect, the DCR’s action reflects continuity rather than expansion. The regulations codify existing disparate impact jurisprudence while providing additional guidance for employers and practitioners navigating increasingly complex workplace decision-making.
A Deliberate State Response to Federal Retrenchment
The timing of the DCR’s action is notable. In 2025, the U.S. Department of Justice eliminated federal disparate impact regulations, signaling a narrowing of federal enforcement. New Jersey has moved in the opposite direction, reinforcing state-level protections and emphasizing that employment outcomes, not merely intent, remain central to discrimination analysis under the LAD.
For employers operating in New Jersey, this divergence underscores the importance of state-specific compliance strategies and the limits of relying on federal enforcement trends when assessing risk.
AI and Automated Decision-Making Take Center Stage
One of the most significant aspects of the new regulations is the explicit focus on artificial intelligence (“AI”) and automated employment decision-making tools. The DCR recognizes that these technologies can unintentionally produce disparate impacts when they rely on biased data, rigid criteria, or insufficient validation.
The regulations highlight several risk areas, including:
- Resume screening and hiring algorithms trained on historical workforce data that may replicate existing demographic imbalances. For example, tools may score resumes differently based on experiences or affiliations that correlate with gender, race, or cultural background.
- Automated scheduling or availability filters that may disproportionately exclude individuals due to religious practices, disabilities, or medical conditions if reasonable accommodation mechanisms are not incorporated.
- Facial analysis or video interview technologies that have not been adequately tested across diverse populations and may disadvantage individuals with darker skin tones, disabilities, or religious practices involving headwear or facial hair.
The DCR cautions that AI systems are not insulated from scrutiny simply because they are automated. To the contrary, employers remain responsible for the outcomes these tools produce and for ensuring that their use complies with the LAD’s disparate impact framework.
What Employers Should Do Now
New Jersey employers should proactively review:
- Job postings and qualification criteria
- Hiring, promotion, and screening practices
- Use of AI or automated evaluation tools
- Any policies that may disproportionately affect protected groups
If a policy results in a disparate impact and cannot be justified by a substantial, legitimate, nondiscriminatory interest or if a less discriminatory alternative exists, it may expose the employer to liability under the LAD.
Conclusion
New Jersey’s new DCR reinforce a fundamental principle of employment law in the state:: employment decisions are judged not only by intent, but by their real-world impact. By formalizing existing disparate impact standards and addressing the growing use of AI and automated tools, the DCR has clarified that neutrality in form does not guarantee compliance in practice.
At a time when federal enforcement is scaling back, New Jersey has taken a deliberate step in the opposite direction, emphasizing outcome‑based fairness and employer accountability. For employers, the message is clear. , Those that proactively review their policies, evaluate the automated tools they rely on, and explore less discriminatory alternatives will be better positioned to mitigate legal risk and align their practices with the LAD’s evolving expectations.
