Governor Phil Murphy has signed an executive order which bars state workers from asking job applicants seeking positions with the state about their previous salaries in his first official act after his swearing-in on January 16, 2018. State entities may now only inquire as to an applicant’s past salary history after the entity has made a conditional offer of employment, which includes an explanation of the compensation package being offered to the applicant. The goal of the executive order is to eliminate wage inequalities that result from female employees who accept lower starting salaries and then remain on a lower compensation track, with pay disparities compounding over time.
Significantly, at the signing ceremony, the Governor stated that he would sign a bill that extended these same provisions to private sector employers which the legislative sponsors vowed to move quickly to his desk. In fact, legislation has already been introduced that prohibits an employer from inquiring about the salary history of an applicant. Assembly Bill 1094 was introduced on January 9, 2018 by Assemblywoman Joanne Downey (D-11) and referred to the Assembly Labor Committee. Senate Bill 559 was introduced by Senator Nia Gill (D-34) on January 9, 2018 and referred to the Senate Labor Committee. The legislation, described by legislative sponsors as an effort to promote pay equity, 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.
Similar to Executive Order No. 1, the pending legislation 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 allows employers to seek salary history if the applicant voluntary discloses this information with written authorization to do so. In addition, under the pending legislation employers would not be permitted to take retaliatory action against an employee or applicant based on salary history.
New Jersey would not be the first state to pass pay equity legislation prohibiting asking applicants about salary history. California, Delaware, Massachusetts, Oregon, and Puerto Rico have already enacted legislation that prohibits employer inquiries concerning a candidate’s prior salary history during the hiring process. Further, New York City, San Francisco, and Philadelphia have also passed laws barring salary history inquiries by private employers, although the Philadelphia law is currently stayed pending a legal challenge.
Executive Order No. 1 goes into effect February 1, 2018. Thus, all State entities should immediately evaluate whether any adjustments to their hiring practices, employment applications, and compensation policies are necessary. Private employers should also be cognizant of the proposed legislation and consider possible adjustments to their hiring practices, employment applications, and compensation policies.
For a comprehensive article on New Jersey’s prior attempts to pass pay equity legislation and our thoughts as to what type of legislation may soon be passed in New Jersey please see “The Push For Pay Equity Legislation in New Jersey.”