Can Employers Ask an Applicant for Salary History?
No, employers are prohibited from asking about an applicant’s salary history during the interview process before a job offer.
In New Jersey, a new law signed by Lieutenant Governor Sheila Oliver on July 25th, specifically prohibits employers from asking job applicants about their salary history in an effort to close the wage gap, especially for women and minorities.
Once the law goes into effect, employers may not request the salary history of potential employees or risk a penalty. It is hoped that the new law will enable skilled job applicants of any gender, race, or other characteristics to paid on the basis of their work experience and credentials and not what they earned in previous positions.
New Jersey’s Salary History Ban (Bill A1094)
Under the new law, employers may not request salary history from job applicants as well as benefits history and commission or other compensation earned at past jobs. The job applicant may freely volunteer the information, but it cannot be held against the prospective employee in determining if the individual is appropriate for the position.
Employers who violate the new law, which will take effect in six months, will receive a civil penalty. For the first violation, a business will be fined $1,000, and $5,000 for the second offense. Each subsequent violation will cost an employer $10,000.
Executive Order Prompted New Law
Governor Phil Murphy signed an executive order titled the Diane B. Allen Equal Pay Act that was introduced shortly after he was inaugurated as Governor in January 2018. It ensures “equal pay for equal work” and was meant to promote equal pay and end the gender wage gap. Furthermore, it bans the practice of using salary and benefits history to evaluate prospective employees who may be in the running for New Jersey state government positions. The new law augments the one already on the books as well as the NJLAD and protects job applicants from discrimination in the hiring process.
How New Law Helps Job Applicants in New Jersey
The new law sharpens the focus on the qualifications and work experience that job applicants possess instead of salary history. This enables previously underpaid job applicants to move past their compensation history and achieve the salaries they deserve for their skill, knowledge, and merit. Research indicates that the state of New Jersey loses billions of dollars simply due to the wage gap. In other studies, it is purported that the largest wage gap exists between Latina women and white men. The new law acts as another tool in erasing discrimination from the job application process and employing individuals with the experience and talent to excel in their chosen fields.