Employers routinely ask applicants for prior salary history when vetting prospective new employees and determining appropriate employment offers. However, a bill passed the New Jersey State Assembly in May 2017 and the State Senate on Monday forbidding New Jersey employers from asking this question of their applicants. This bill will not become the law of New Jersey until it is signed by Governor Christie.
This prospective law prohibits private employers from seeking information directly from the applicant and from prior employers regarding an applicant’s prior wages. Former employers would need written authorization from their former employees to permit the release of such information. The language of the bill specifically exempts the Federal Government, State Government, Municipalities, and School Districts from compliance and recognizes that such inquiries may also be appropriate in the context of a collective bargaining unit and negotiations.
The law would be enforceable immediately and violations of the new law, if it is signed by the Governor, would result in a civil penalty in an amount not to exceed $2,000 for an employer’s first violation and $5,000 for each subsequent violation. This penalty would be payable to the Commissioner of Labor and Workforce Development and not to the aggrieved party.
This law is a tool lawmakers hope will help to alleviate the gender pay gap, which studies show remains an issue for women. New York City recently passed a similar bill which prohibits public and private sector employers from using an individual’s salary history to determine a new salary offer.
If you utilize wage history in connection with your hiring process, you should pay careful attention to the implementation of this law. In addition, New Jersey employers are wise to carefully consider releasing wage history regarding their prior employees in light of this pending legislation.