Employers in New Jersey may no longer ask job applicants how much they made at their last job, thanks to a new law passed by the Legislature in June 2019 and signed by the Governor in July. The bill amends several provisions of New Jersey employment discrimination laws to prohibit employers from “screen[ing] a job applicant based on the applicant’s salary history.” Inquiries about salary history can offer employers a way around laws against pay discrimination, such as the federal Equal Pay Act (EPA). When an employer bases hiring or salary decisions on how much an applicant made at their previous job, it tends to perpetuate existing wage imbalances. As of December 2019, sixteen states, the District of Columbia, Puerto Rico, and multiple local governments have enacted laws prohibiting salary history inquiries to various degrees.
The EPA prohibits discrimination in pay on the basis of gender, meaning that employers must pay male and female employees the same for work that “requires equal skill, effort, and responsibility…under similar working conditions.” 29 U.S.C. § 206(d)(1). It makes exceptions for different rates of pay based on seniority, merit, “quantity or quality of production,” or “a differential based on any other factor other than sex.” Id. Bans on salary history inquiries are partly motivated by concerns that past salary could fit into that last category. The status quo in the United States in late 2019 is that multiple wage gaps exist. People can argue over what causes these gaps, but their existence is difficult to dispute. Employment decisions based on salary history, regardless of an employer’s intent, can serve to entrench the disparities.
State laws governing salary history inquiries vary widely in what they prohibit and allow. Alabama, for example, passed a law around the same time as New Jersey that bars employers from making an adverse employment decision based solely on an applicant’s refusal to provide information on their salary history. It does not expressly prohibit employers from asking for such information. California’s law, enacted in 2017, bars employers from asking, and goes much further. Employers in California may not “rely on the salary history information of an applicant for employment” in either hiring or salary decisions, unless the applicant voluntarily discloses the information.
The protections offered by New Jersey’s law fall between those in Alabama and California. The bill prohibits the use of salary history to screen job applicants, as well as setting “minimum or maximum criteria” for salary history. Employers may consider salary history as a factor in determining a new employee’s compensation if the individual voluntarily offers the information, without the employer asking. Employers may not base an adverse employment action on an applicant’s refusal to provide salary history. These prohibitions do not apply to salary information obtained as a result of the applicant’s prior employment with the employer, information obtained in a required background check that is not related to salary, or disclosures required by state or federal law.
The new law imposes civil penalties for violations by employers. It also amends the NJLAD to create a cause of action for violations that affect a member of a protected class, such as race or sex. See N.J. Rev. Stat. § 10:5-12(a).
The skilled and experienced attorneys at the Resnick Law Group are available to help you with an employment dispute involving gender discrimination or any other form of discrimination in New Jersey or New York. Please contact us online, at 973-781-1204, or at 646-867-7997 today to schedule a confidential consultation to discuss your rights and options.