Salary History is Off-Limits for New Jersey Employers

Last month, New Jersey amended the New Jersey Law Against Discrimination to prohibit employers from inquiring about a job applicant’s salary history. The Amended law bars employers from:

  1. Screening an applicant based on wage or salary history;

  2. Maintaining a minimum or maximum criteria related to an applicant’s prior salary and/or benefits;

  3. Relying on compensation history in determining a salary amount for the applicant;

  4. Inquiring about salary history, which includes compensation and benefts.

It is important to note that the Act prohibits employers from inquring about prior compensation and benefits. Thus, Employers cannot ask about a job applicant’s prior paid-time-off policy, remote work capability, sick-time, health insurance or any other type of benefit from that individual’s prior employer.

The Act allows for an employer to seek the applicant’s history if the employee, “voluntarily, without employer coercion, provides the employer with a written authorization.” While this is permitted by the Act, it is prudent for Employers to tread lightly. New Jersey made it clear that the purpose of this amendment is to promote equal pay for women. In light of the strong public policy of Equal Pay, relying on a salary history, even voluntarily given, risks exposure for the Employer.

Lastly, the Act adds yet another restriction. Employers can no longer require its Employees to keep quiet about their individual salaries and benefits. Employers cannot prohibit employees from discussing the following information to current or former employees: (1) job tite, (2) occupational category, (3) rate of compensation, (4) gender, (5) race, (6) military status, or (7) national origin of the Employee, any other Employee, or any former Employee of the Employer.

It is worth noting that the Act is silent with respect to whether an Employee can make such disclosures to a prospective employee. It stands that Employers may prohbit an Employee from discussing the enumerated categories with a prospective employee. However again, in light of the public policy behind this Amendment, it is not prudent for an employer to admonish an Employee for such disclsoure. Transparency relating to compensation and benefits is the best way to avoid exposure to liability under this Act.

New Jersey is not the only state that has enacted such a ban on salary histories. In fact, 12 states have enacted similar state-wide legistation that bars all employers within that state from inquiring about salary history.

  • Alabama: Employers cannot retaliate against an applicant for refusing to provide a salary history. (Clark-Figures Equal Pay Act)

  • California: Employers cannot (1) request salary history information, (2) rely on salary history when evaluating whether to hire an individual, or (3) rely on salary history when assessing what salary to offer an individual. (Assembly Bill No. 2282)

  • Colorado: Employer cannot (1) seek the wage rate history of a prospective employee, (2) rely on prior wage rate to determine a starting salary, (3) discriminate or retaliate against a prospective employee for failing to disclose their wage history, or (4) retaliate against an employee for discussing wage rates. (Equal Pay for Equal Work Act)

  • Connecticut: Employers cannot ask about a candidate’s salary history. (An Act Concerning Pay Equity)

  • Delaware: It is an unlawful employment practice for an employer to screen applicants based on compensation history or request compensation history from an applicant or the applicant’s current/former employer. (Delaware Code Relating to Unlawful Employment Practices)

  • Hawaii: No employer shall inquire about the salary history of an applicant for employment, or rely on same for determining the salary, benefits or other compensation for the applicant during the hiriing process and/or the negotiation of an employment contract. (Senate Bill 2351)

  • Illinois: No employer shall (1) screen applicants based on salary history, (2) maintain minimum or maximum criteria bsaed on prior wages, or (3) request prior wages of an applicant as a condition of being interviewed. (Illinois House Bill 834)

  • Maine: An employer may not use or inquire about the compensation history of a job candidate. However, an employer is allowed to make such an inquiry after an offer of employment has been made, and the terms of compensation have been negotiated. (An Act Regarding Pay Equality)

  • Massachusettes: Employers are prohibited from seeking the wage or salary history of a prosective employee. It is also unlawful for an employer to require an employee to refrain from discussing or disclosing information about and employee’s own wages or any other employee’s wages. (Section 105A: Discrimination on the Basis of Gender in Payment of Wages Prohbited; Enforcement; Unlawful Practices; Good Faith Self-Evaluation of Payment Practices)

  • Oregon: It is an unlawful practice for an employer to seek the salary history of an applicant. (House Bill 2005)

  • Vermont: An employer shall not (1) inquire about information regarding a job candidate’s current or past compensation, (2) have maximum or minimum criteria related to a prospective employee’s past compensation, or (3) determine whether the individual will get an interview based on current or past compensation. (An Act Relating to Inquiries About an Applicant’s Salary History)

  • Washington: An employer may not seek salary history from a prospective employee nore require that the prior salary meet certain criteria. (House Bill 1696)