On December 15, 2025, the New Jersey Division on Civil Rights (DCR) issued new comprehensive rules that codify and reinforce disparate impact liability under the New Jersey Law Against Discrimination (LAD) in employment and other contexts. The rules, which aim to codify existing case law in New Jersey, come as the federal government has ceased enforcing federal antidiscrimination laws based on disparate impact theories, instead focusing on intentional discrimination.

• On December 15, 2025, New Jersey issued rules codifying disparate impact liability under the Law Against Discrimination (LAD) across various sectors, including employment, by clarifying that neutral practices with a disproportionately negative effect on protected classes could violate the law unless proven necessary for a legitimate business interest.
• The rules clarify a burden-shifting framework for disparate impact claims, requiring complainants to demonstrate impact and employers to provide empirical evidence justifying their policies as necessary to meet substantial, legitimate interests.
• The regulations address employers’ use of automated employment decision-making tools, highlighting that such practices must be carefully evaluated to avoid inadvertently creating a disparate impact.

The new “Rules Pertaining to Disparate Impact Discrimination,” New Jersey Administrative Code (N.J.A.C.) 13:16, clarify existing standards recognized under the LAD, applying to employment, housing, public accommodations,...

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