New Jersey has enacted legislation (Assembly Bill 1094) that prohibits employers from asking applicants about their salary history. Assembly Bill 1094 takes effect on January 1, 2020.
Assembly Bill 1094:
Under Assembly Bill 1094, employers can’t: ask about an applicant’s salary history; require that an applicant’s salary history satisfy certain maximum or minimum criteria; screen applicants based on prior wages, salary, or benefits; or rely on the applicant’s prior salary to determine a salary amount for an applicant at any stage of the hiring process.
If the employer conducts a background check, they should specify that salary history information should not be included in the results, and if received inadvertently, salary history should not be considered.
Exceptions:
There are a few exceptions to the law, including but not limited to:
· If an applicant voluntarily and without prompting, discloses their salary history, the employer can verify the salary history, and consider the salary history in determining the applicant’s future compensation;
· After an employer extends a job offer with an explanation of compensation to an applicant, the employer may verify an applicant’s salary history after obtaining their written consent.
· When a federal law or regulation expressly requires the disclosure or verification of salary history for employment purposes, or requires knowledge of salary history to determine an employee’s compensation.
· Applications for internal transfer or promotion
· Inquiries concerning an applicant’s experience with incentive and commission plans (but not the earnings under those plans) when the applicant is applying for a role where the compensation includes an incentive or commission plan.
Compliance Recommendations:
New Jersey employers should review their hiring procedures and remove salary history questions from their application forms. Anyone involved with screening or interviewing applicants should also be trained on the law.
Please contact your dedicated service professional with any questions.