NJ Employers Must Stop Asking About Salary in 2020

Starting on January 1, 2020, employers in New Jersey will no longer be permitted to ask job applicants about their previous salaries. Lieutenant Governor Sheila Oliver signed Assembly Bill A1094 into law in July of 2019.

The move comes as an effort to close the gender pay gap. By banning the salary question for new hires, employers will have less justification to pay a female candidate a lower salary than a male candidate.

New Jersey joins 18 other states and a number of cities and regions in banning the salary history question. This law comes on the heels of another banning the question for prospective state government employees.

What Can’t Employers Do?

Employers can no longer screen potential employees on the basis of salary history. That means they cannot ask questions in an interview, and they cannot have salary-history-related questions on any job applications either. It also prohibits salary questions from third parties on behalf of the employer, such as headhunters and recruiters.

If employers obtain publicly available salary information on a prospective employee, they may not use that information for salary negotiations.

What Can They Do?

Employers can consider past salary if the employee volunteers salary history willingly and without coercion. Employers may also confirm salary history in writing after they’ve made an offer of employment to the candidate.

New Jersey-based employers who operate in other states are not prohibited from asking about salary history, as long as they instruct applicants for a New Jersey job not to answer the question. This law does not apply to internal hires, or to any employers following federally-mandated salary disclosure guidelines.

Finally, employers may ask a candidate what his or her desired salary or salary range is.

What’s the Penalty for Noncompliance?

The penalty for breaking this new law will depend on whether the applicant is in a protected class.

Not protected: $1,000 for the first instance, $5,000 for the second instance, $10,000 for the third and subsequent

Protected: The applicant may pursue damages for lost wages and emotional distress. Attorney fees and punitive damages are prohibited, however.

How Should Employers Prepare?

Employers should be revising all their hiring materials, including the interview process and any paper or online applications. They need to ensure these materials are scrubbed of all questions related to salary history.

Employers should also be training personnel, especially human resources and hiring managers, on the law and what they are and are not permitted to ask.

If you need help preparing your business for the coming change, speak with a member of Anselmi & Carvelli, LLP’s Employment Counseling and Litigation practice. We can help you navigate the legal intricacies of A1094 and all other changes that may affect your business in 2020 and beyond.