NJ Employment Law Update: Salary History Ban
In yet another step toward strengthening equal pay protections among workers, New Jersey joins the list of states that will now prohibit companies from asking prospective employees about their salary history.
The new law, which will take effect in January 2020, makes it illegal for employers to ask about an applicant’s salary, commission or benefits history during the hiring process. Companies may only consider this information if voluntarily offered by the applicant without coercion, and may not make any employment decision based on an applicant’s refusal to provide this information. Companies may also not require that a prospective employee’s salary satisfy any minimum or maximum requirements.
Companies that conduct pre-employment background checks on job applicants prior to making a job offer may not request salary history. However, after an offer of employment has been made with accompanying compensation information, an employer may request that the applicant provide a written authorization to confirm the previous salary history.
The purpose of the new law is to close the wage gap among women and minorities where past discriminatory pay practices may have followed individuals through their careers. Instead, companies are to focus on an applicant’s skills, qualifications, and experience.
Employers who violate the provisions of the law will face penalties that range from $1,000 to $10,000 for repeat violations.
Employers should prepare for this new law by removing any inquiry from their employment application and other hiring documents that request current and past salary information. Additionally, it is important to educate all executives, managers, human resources professionals and any other individual involved in the hiring process about the restrictions outlined in the new law.