New Jersey’s New Law Prohibits Employers From Requiring Salary History

In the summer of 2019, New Jersey passed a new law that prohibits employers from requesting or relying on job applicants’ salary history (or worker’s wages), and it goes into effect on January 1, 2020.

What the New Law Prohibits

Specifically, the new law prohibits any employer from screening a job applicant based on his or her salary or wage history, which includes asking the applicant to disclose prior wages and/or salaries as well as benefits. Employers also cannot rely on an applicant’s salary in determining the applicant’s future salary amount at any stage during the hiring process. This includes employers inquiring in writing or otherwise about their salary history, compensation, and/or benefits.

Any employer who violates the new law could face a penalty in the amount of $1,000 to $10,000 (depending upon the number of violations) as well as additional penalties that could be brought under state laws against discrimination.

What it Allows, With Conditions

However, the law does allow the applicant to voluntarily provide salary history (only without prompting from the employer), and, if he or she does so, it allows the employer to verify that salary history. In addition, the law does not apply to promotions, nor does it override circumstances in which federal law mandates the disclosure of an applicant’s salary history.

In addition, there are circumstances in which employers can inquire about an applicant’s experience – for example, when the job involves a commission – however, they are still explicitly prohibited from seeking information related to salary, wages, and/or earnings. Employers are still allowed to look into non-salary-related information when it comes to any and all positions, as long as they make it clear that salary history should not be disclosed, and if salary history is accidentally or otherwise disclosed during that inquiry, the employer must take steps to ensure that it is not considered in determining compensation for that applicant.

Background and Ramifications

The law was passed in an effort to fill in gaps with respect to the state Equal Pay Act, which addresses how employers can and cannot justify pay disparities between employees who perform substantially similar work. The Act failed to address inquiries into benefits and compensation.

As a result of the new law, employers will need to revise not only their hiring practices but their employee/HR manuals as well in order to ensure that they are not violating the new law.

Contact Our Marlton and Red Bank, New Jersey Employment Law Attorneys

The experienced attorneys of McOmber McOmber & Luber, P.C. provide knowledgeable employment law advice and representation to employers, employees, job applicants, and others involved in employment law issues. Contact our Red Bank, Newark or Marlton office today to find out more about New Jersey’s new law or any other employment law matter.