New Jersey Bill Would Prohibit Employers From Inquiring Into Compensation History

Earlier this month, the New Jersey State Assembly reviewed Assembly Bill 4119 (“A-4119”), which would amend the New Jersey Law Against Discrimination to prohibit employers from seeking compensation history from prospective employees. The purpose of A-4119 is “to strengthen protections against employment discrimination and thereby promote equal pay for women[.]”

Specifically, A-4119 provides that an employer may not seek the salary history of a prospective employee until an offer of employment is extended to the candidate. The Bill further prohibits an employer from requiring an employee to disclose information about either his or her own wages, including benefits and other compensation, as well as the wages of any other employee. Additionally, A-4119 provides that an employer may not require that a prospective employee’s wage or salary history meet any minimum or maximum criteria as a condition of being interviewed or as a condition of being considered for an offer of employment. Under A-4199, an employer is prohibited from taking any retaliatory action against an employee or candidate based upon compensation history or any employee’s opposition to a request for salary information.

The Bill, however, does not prohibit prospective employees from volunteering compensation history provided that the disclosure is not coerced by the employer. An employer may only confirm or permit a candidate to confirm compensation history after making an offer of employment.

If passed, the proposed law would have a significant impact on the hiring process in New Jersey. First, employers would need to revise application materials to eliminate any written questions concerning a candidate’s salary history. Interview questions would also need to be amended to reflect this change. In doing so, an employer could no longer use salary as a criterion to determine what candidates would be most likely to pursue an employment opportunity with the employer based upon a desired salary range.

Additionally, any economic considerations employers previously took into account when reviewing salary history could no longer be a factor in the hiring process. Moreover, and perhaps most importantly, an employer would be deprived of this information during the negotiations process. Typically, salary terms are a critical point of discussion amongst employers and potential candidates during the hiring process. Under this proposed legislation, however, salary and wage history may only be confirmed after an offer of employment has been made. Therefore, employers would be deprived of this crucial step during the hiring process.

We will continue to monitor this legislation and provide any relevant updates should its status change. Please contact Lindabury, McCormick, Estabrook & Cooper, P.C. with any questions.

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