Effective Jan. 1, 2020, it is now an unlawful employment practice in New Jersey to screen job applicants based on the applicant’s salary history, including but not limited to prior wages, salaries or benefits.

While an employer may consider salary history in determining future compensation, an employer may do so only if the applicant voluntarily and without employer prompting or coercion, provides the employer with his or her salary history.  An applicant’s refusal to volunteer compensation information shall not be considered in any employment decision.  N.J.S.A. 34:6B-20(b).

Several exceptions to the prohibition have been written into the law.  One such exception includes applications for internal transfers or promotions within the employee’s current employer.  Use by the employer of previous knowledge obtained as a consequence of prior employment with the same employer is also permitted. N.J.S.A.34:6B-20(c)(1).

Moreover, when knowledge of an applicant’s past salary or benefits is expressly required by federal law or regulation, or requires knowledge of salary history to determine an employee’s compensation, consideration of a potential employee’s salary is also permitted. N.J.S.A.34:6B-20(c)(2).

Nothing prohibits an employer from acquiring salary history information that is publicly available. However, the employer shall not retain or consider that information when determining the applicant’s salary and benefits unless the applicant voluntarily provides the employer with a salary history.   N.J.S.A.34:6B-20(1)(h).

Employers are warned that a finding of a violation of this law will result in a finding of an unlawful employment practice by the N.J. Attorney General’s Office, which could result in such remedies as hiring, reinstatement or upgrading of an employee with or without backpay as well as awarding of reasonable attorney’s fees in some cases.

Additionally, employers could be subject to civil penalties of $1,000 for a first violation, $5,000 for a second violation and $10,000 for each subsequent violation for sharing salary information with other potential employers without the express consent of the applicant.

It is very important that school districts review this law closely with their board attorneys to ensure that their hiring practices are in compliance with this new law.  Further information can be obtained from NJSBA’s Legal and Labor Relations Department by calling 609-278-5254. Stay tuned for a more in-depth article on the Salary History Law in the March/April, 2020 edition of the NJSBA’s magazine, School Leader.