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.