New Jersey Salary History Ban Takes Effect January 1

A reminder to New Jersey employers that the new law prohibiting employers from screening job applicants based on their pay history takes effect on January 1, 2020.

The law prohibits employers from asking current or prospective employees about their salary history, including wages, salaries, and/or benefits, and it prohibits employers from requiring applicants to satisfy any minimum or maximum salary criteria. The law also prohibits employers from considering applicants’ refusal to volunteer their salary history in making any employment decisions, including finalizing an employment contract.

The law creates a carveout for employees subject to collective bargaining agreements or covered by civil service laws. The law also contains certain exceptions. For example, it permits employers to consider an applicant’s salary history if it is voluntarily provided without coercion.

The law also allows employers to ask applicants to provide written authorization to confirm the salary history after making a job offer that includes an explanation of the “overall compensation package.” Also, employers are allowed to acquire publicly available salary history, but they may not retain or consider it when determining the applicant’s salary, benefits, or other compensation unless the applicant voluntarily provides it.

Civil penalties set

Employers that violate the law are subject to civil penalties in an amount not to exceed $1,000 for a first violation, $5,000 for a second violation, and $10,000 for each subsequent violation.

The law also amends the New Jersey Law Against Discrimination (NJLAD) and makes asking about salary history an unlawful employment practice if the applicant belongs to a protected class. An employer that violates the provisions will be subject to remedies under the NJLAD except an award of punitive damages.

Bottom Line

New Jersey employers must immediately review and update Job Applications, Handbooks and internal HR Policies to ban inquiries regarding salary history, prohibit pay discrimination and retaliation. Employers must also train any individuals involved in the interview or recruiting process to focus and document a job candidate’s skills and qualifications for the position and must shift the conversation with a potential applicant away from salary history to the candidate's salary expectations in order to ensure compliance with the new salary ban law to protect itself from liability.

For more information on New Jersey’s salary history ban and for guidance on how to avoid discrimination in hiring, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Counseling & Compliance Practice Group at 973-533-0777.