Salary History Inquiry Bans Impact New York and New Jersey Employers
Author: David B. Weisenfeld, XpertHR Legal Editor
January 15, 2020
New York and New Jersey have joined the trend of states banning private employers from asking job applicants about their salary history. In all, 14 states have passed laws prohibiting or significantly restricting such inquiries.
New York's Ban
Effective January 6, 2020, New York employers may not request, require or seek an applicant's or current employee's salary or wage history as a condition of:
- Receiving an interview;
- Deciding whether to make a job offer;
- Continuing employment; or
- Being considered for promotion.
New York's new law also bars employers from refusing to interview, hire, promote or otherwise retaliate against an applicant or employee for filing a complaint with the New York State Department of Labor.
The New York measure does not prevent applicants and employees from voluntarily disclosing their salary history, including for the purpose of negotiating compensation. However, employers may not rely on that information to justify a pay difference between employees of different classes who are performing the same or substantially similar work.
A newly released guidance attempts to clarify the law by noting that it also applies to:
- Current employees (unlike some other bans);
- Applicants for part-time, seasonal and temporary positions; and
- Individuals hired through an employment agency.
Across the Hudson River
Effective January 1, 2020, New Jersey also prohibits employers from screening job applicants based on their salary history or requiring that their salary history satisfy any minimum or maximum criteria.
New Jersey already banned salary history inquiries for state government jobs, but a new law applies that prohibition to private employers as well. Much like similar measures elsewhere, the New Jersey law aims to remedy a gender wage gap between men and women for performing similar work.
According to a statement issued by the governor's office, studies show that women who hold full-time, year-round jobs in New Jersey are paid 82 cents for every dollar paid to men holding full-time, year-round jobs. The statement also called the wage gap between Latina women and white men in New Jersey "the largest in the nation."
The law includes substantial penalties for noncompliance, including civil penalties of up to:
- $1,000 for a first violation;
- $5,000 for a second violation; and
- $10,000 for each subsequent violation.
As with the New York law, New Jersey employers may still consider salary history information if an applicant provides it "voluntarily, without employer prompting or coercion." They also may request that applicants provide written authorization to confirm their salary history after making an employment offer that includes an explanation of the overall compensation package.
The New Jersey measure also provides exemptions for situations involving:
- Internal transfers or promotions;
- Actions taken where a federal law or regulation expressly requires the disclosure of salary history for employment purposes;
- Inquiries about applicants' experience with incentive and commission plans, as long as the employer does not seek or require applicants to report their earnings under these plans; and
- Accidental disclosures of salary history during background checks so long as the employer does not retain or consider the information when determining the applicant's salary, benefits or other compensation.