New Jersey: Statewide Salary History Inquiry Ban Implemented, with a Few Twists

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All Employers with NJ Employees

EFFECTIVE

January 1, 2020

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Like Illinois, New Jersey recently jumped into the pool of states implementing legislation banning salary history inquiries.  Beginning January 1, 2020, Bill A1094 will prohibit employers from inquiring into an applicant’s prior salary history (including wages, salary, or benefits), or screen applicants for a job based on a minimum or maximum salary threshold, except under certain circumstances.

Exceptions to the new rule include:

  • Applicants may voluntarily disclose their own salary history. Employers are permitted to verify voluntary disclosures and, in a departure from many other similar state laws, may use such voluntary disclosures to determine the applicant’s compensation level.
  • Multi-state employment applications can contain salary history questions, with a disclaimer that an applicant for a position located in New Jersey should not answer the question.
  • Employers can seek post-offer verification of salary history with written authorization from the applicant, and only if the offer of employment contains an explanation of the overall compensation package.
  • Internal transfers or promotions are exempt from the rule.
  • Background checks that unintentionally include salary history information (e.g., employer instructed background screening vendor not to include such information, but the salary history was still reported) will not violate the law so long as employers destroy the salary history information and do not utilize it during employment decision-making.
  • Discussions regarding the terms and conditions of incentive and commission plans that the applicant was subject to at a previous employer, provided that employers do not ask for specific dollar amounts in the plans and that the job the applicant is currently interested in includes an incentive or commission component.

Unlike other state and local ordinances, however, the New Jersey bill also includes carve-outs for employment agencies that applicants utilize to seek work.

Action Items

  1. Read the full text of the bill here.
  2. Have employment applications and hiring processes updated to remove any request for salary history information.
  3. Have hiring managers trained on new applicant screening restrictions.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

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