Can An Employer Ask Me For My Prior Salary As Part of a Job Application?

In New Jersey, the answer to that question is now a firm “no.”

Recently, during the summer of 2019, the state enacted an amendment to the New Jersey Law Against Discrimination that bans employers from asking prospective employees about their salary history as part of a job application or interview.  The measure is aimed at closing the pay gap for workers, particularly females, who have historically been subject to pay disparities based upon their gender, race, or other membership in a legally protected class. This new ban goes into effect January 1, 2020.

Specifically, the ban prohibits employers from:

1. Screening job applicants based upon their salary history, including prior salary, wages, and benefits;
2. Requiring that an applicant’s salary history satisfy a minimum or maximum threshold.  In other words, an employer can’t refuse to consider applicants because they made more or less than a certain amount in their previous job.

As a practical matter, the ban means that employers cannot ask New Jersey job-seekers about their past salary, wages, and benefits as part of an application or during an interview.  If they do, they are subject to civil penalties up to $10,000 per violation.

Exceptions where an employer can ask your previous salary

Of course, the law carves out certain common-sense exceptions where the sharing of past earnings information is permitted.  For instance:

Voluntary Disclosures.  If a job applicant volunteers his or her salary history without prompting or pressure by the employer, then the employer may verify that the applicant’s salary history is accurate and correct.  The employer may also use that history to determine the applicant’s compensation.

Written Authorization Following Job Offers:  After an employer extends a job offer to an applicant that includes an explanation of the overall compensation package, the employer may request, and the applicant may execute, a written authorization permitting the employer to confirm the applicant’s salary history.

However, please note that employers are prohibited from considering an applicant’s refusal to volunteer salary history information in making employment decisions.  As such, employers cannot withdraw an offer of employment simply because an applicant refuses to sign an authorization allowing the employer to check his or her past salary.

Where the NJLAD ban does not apply

Internal transfers and promotions.  The ban does not apply to applicants seeking a different position with the same employer (obviously, the employer would be privy to the applicant’s salary history already).

Incentive and commission plans.  This exception applies to applicants for positions, such as those in sales and marketing, that rely on incentive and commission plans as part of compensation.  In these instances, employers are allowed to ask applicants about the “terms and conditions” of their prior incentive/commission plans, but not about any specific dollar amounts involved in those plans.

Presumably, this means an employer may ask an applicant about details like how many sales his or her prior plan required to earn an incentive, or the general commission structure at his or her prior company.  The employer may not, however, ask the applicant how much he or she actually made in incentives and commissions.

Finally, the ban on salary history inquiries extends to employment staffing agencies, meaning workers hired through temp agencies and the like are also protected.  While an applicant may voluntarily provide his or her salary history to a staffing agency, the agency cannot disclose that information to a prospective employer without the applicant’s written consent.

The ban on salary history inquiries is a significant change to the New Jersey Law Against Discrimination.  Those seeking jobs in the New Year would do well to keep it in mind as they apply for new work.