Effective January 1, 2020, New Jersey employers may no longer screen applicants based on wage, salary, or benefits history. Employers are now prohibited from requiring an applicant to disclose past salaries, and from requiring that an applicant’s salary history satisfy any maximum or minimum threshold to be considered for a job.
If an applicant voluntarily provides an employer with their salary history without prompting or coercion, then employers may verify the applicant’s salary history and may consider the information when determining salary, benefits, and other compensation. Employers may also request an applicant to provide written authorization for the employer to confirm the applicant’s salary history after an offer of employment has been made to the applicant that includes an explanation of the compensation package.
The prohibitions under this new law do not apply to applicants for internal transfers or promotions, nor are there any prohibitions for an employer to verify an applicant’s disclosure of non-salary-related information via a background check as long as the employer requests that the salary history not be disclosed. If the background check still includes a disclosure, then an employer must destroy the salary history information and may not use it.
The salary history ban also applies to employment agencies. If an applicant provides salary information to an employment agency, the agency may not share the information with potential employers without the express written consent of the applicant.
The trend of prohibiting salary history inquiries has been growing steam over the last several years. Currently 13 states and multiple counties and municipalities have enacted laws to curb private employers from the dated practice.