Legislation has been signed into law making it an unlawful employment practice for a NJ employer to screen a job applicant based on salary history, including prior wages, salary, commission, benefits or any other current or previous compensation. While the Diane B. Allen Equal Pay Act, signed by Gov. Murphy in 2018 prohibits employers from paying women less than men, this new legislation seeks to further close the wage gap by banning prospective employers from offering lower salaries based on salaries earned in previous employment, typically lower for women and minorities.
The law does not apply to applications for internal transfer or promotion within the current employer and becomes effective in January 2020. Employers will need to review job applications, train hiring managers and evaluate internal compensation programs.
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Can we ask an applicant what they hope to earn in the job if we were to hire them?
Yes. There is no prohibition in the statute limiting a prospective employer from asking an applicant what their desired salary would be.
Can we contact a former employer of an applicant and ask what the applicant earned?
A prospective employer may conduct a background check of non-salary related information provided they specify that the salary is not be disclosed. If salary history is disclosed nonetheless, the prospective employer shall not use such information when determining the salary of the applicant. A prospective employer can request the applicant provide a written authorization to confirm salary history only after an offer of employment has been made.