The New Jersey Legislature is poised to take up another thorny issue for employers, salary history. Described by legislative sponsors as an effort to promote pay equity, the legislation would amend the New Jersey Law Against Discrimination to bar employers from asking job applicants about their salary history, or relying on it to determine salary at any stage in the hiring process.
Two separate pieces of legislation have been introduced that prohibit an employer from inquiring about the salary history of an applicant. Assembly Bill 4119 was introduced on September 15, 2016 and referred to the Assembly Labor Committee. Senate Bill 2536 was introduced on September 15, 2016 and referred to the Senate Labor Committee.
New Jersey would be the second state to pass pay equity legislation prohibiting asking applicants about salary history. In August 2016, Massachusetts became the first state to pass such an Act. The Massachusetts Act banned employers from inquiring into an applicant’s salary history until “after any offer of employment with compensation has been made to the prospective employee.”
The bill introduced to the New Jersey Assembly similarly provides that an employer may “confirm, or permit the prospective employee to confirm, the wage or salary history information after making an offer of employment to the prospective employee.” Moreover, the legislation introduced in the Assembly and Senate allows employers to seek salary history if the applicant voluntary discloses this information. The Senate bill further requires employers to receive written authorization to do so. Employers should be aware, however, that they cannot coerce applicants into providing such information.
In addition, employers would not be permitted to take retaliatory action against an employee or applicant based on salary history or, in the case of the Senate bill, for disclosing salary information to any other employee.
Employers should be cognizant of these potential new requirements and consider whether to adjust their hiring practices and compensation policies accordingly.