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Employment Law Blog

New Jersey Bill A1094 Limits What Employers Can Ask Job Applicants About Past Wage Or Salary

August 9, 2019

On July 25th, New Jersey Bill A1094 was signed into law and will be effective on January 1, 2020. The new law prohibits employers from asking job applicants about past wages or salaries or to screen applicants based upon wage or salary history unless such information is voluntarily offered by the applicant. The law is intended to curb workplace discrimination and wage inequality for women and minorities. It is recognized that women make roughly $10,000 less per year than men. The act of acquiring knowledge of past wages has been found to taint the hiring process by perpetuating prior discrimination. Violations of the new law carry heavy consequences: $1,000 for a first violation, $5,000 for the second and $10,000 per violation after that. Such violations are also violations of the New Jersey Law Against Discrimination and expose employers to lawsuits.

How does this prohibition change the dynamic of the interview process for New Jersey employers? Employers must be cautious about the information that they request. Even oblique wage inquiries can be illegal. Questions on the application such as “applicant’s desired salary” or “applicant’s desired hourly rate” may seem to be directed at the employee’s desire but now might be found to be prohibited as pre-employment offer questions.

Employers may consider salary history in determining salary, benefits, and other compensation, and may verify an applicant’s salary history, if the applicant voluntarily, without employer prompting or coercion, provides salary history. Employers may also, after making an offer of employment which includes an explanation of the overall compensation package to the applicant, request the applicant to provide a written authorization to confirm salary history. However, the applicant may refuse to provide such information without adverse consequence.

Questions regarding wages, salaries, or benefits must be deferred until after the offer of employment has been accepted. These prohibitions do not apply to applications for internal transfer or promotion or knowledge obtained from prior employment with that employer. The prohibition also does not apply to employers acting pursuant to any federal law or regulation expressly requiring disclosure or verification of salary history for employment purposes. Employers may verify disclosures of non-salary information when conducting a background check provided the employer stipulates that salary information is not to be disclosed. Where the application is for a position involving incentive or commission plans, an applicant’s previous experience with incentive and commission plans and the terms and conditions of those plans may be solicited, provided there is no disclosure of the applicant’s prior earnings.

Business owners should now begin preparations for 2020 compliance by reviewing their hiring process, including application forms and questions to be asked during a job interview. This would be an excellent opportunity to critically review the hiring process and to weed out all illegal inquiries that may have remained due to inertia or other forms of inaction. Asking the wrong things, including past wage history, is dangerous and can be costly.

Attorney: Gary Young
Related Practice: Labor and Employment
Category: Equal Pay Act, Wage & Hour, Discrimination