New Jersey Employers Get Reprieve from Salary History Ban

Gov. Chris Christie Recently Vetoed Legislation That Would Have Imposed New Compliance Obligations On New Jersey Employers  Pertaining to Prospective Employees’ Salary History

Gov. Chris Christie recently vetoed legislation that would have imposed new compliance obligations on New Jersey employers. The bill would have amended the New Jersey Law Against Discrimination to prohibit employers from requesting salary history information from prospective employees.

Proposed Salary History Restrictions

Assembly Bill Nos. 3480 and 4119, which were combined in committee, would have banned employers from inquiring about the salary history of a job applicant, including the prospective candidate’s compensation and benefits. It would have prohibited employers from screening a job applicant based on the applicant’s wage or salary history, such as requiring that a job candidate’s prior compensation history meet any minimum or maximum criteria. Employers would also have been prohibited from relying on the applicant’s salary in determining a salary amount for the applicant at any stage in the hiring process.

The proposed New Jersey employment legislation also included an anti-retaliation provision that prohibited employers from retaliating against an employee or prospective employee based upon prior wage or salary history or because the individual opposed any act or practice made unlawful by the NJLAD amendments. The final version of the wage history bill also included provisions restricting employers from taking reprisals against any employee for disclosing to any other current or former employee information regarding the job title, occupational category, rate of compensation, the gender, race, ethnicity, military status, or national origin of the employee or any other employee or former employee.

Gov. Christie’s Veto Message

In vetoing the employment bill, Gov. Christie agreed that “[d]iscrimination has absolutely no place in our modern workforce or in our State.” However, he argued that the legislation regulated much more than discriminatory conduct. He wrote:

In fact, this bill’s language would punish, as discriminatory, otherwise innocuous conduct done with neither discriminatory intent nor a discriminatory impact. I will continue to support the Legislature in its attempts to end wage discrimination, but I cannot sign a bill that fails to align with not only the purpose but also the other provisions of the law it seeks to amend.

This is not the first bill seeking to address pay discrimination that Christie has vetoed. It is likely that lawmakers will introduce the same or similar legislation once he is out of office next year.

Federal Ban of Seeking Wage History

In May, the Pay Equity for All Act of 2017 was introduced in the U.S. House of Representatives. It would amend the Fair Labor Standards Act (FLSA) to restrict employers’ ability to seek employees’ and prospective employees’ salary and benefit history. The bill specifically provides that it would be an unlawful practice for an employer to:

• Screen prospective employees based on their previous wages or salary histories, including benefits or other compensation, including by requiring that a prospective employee’s previous wages or salary histories, including benefits or other compensation, satisfy minimum or maximum criteria, or request or require as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment or as a condition of employment, that a prospective employee disclose previous wages or salary histories, including benefits or other compensation;
• Seek the previous wages or salary history, including benefits or other compensation, of any prospective employee from any current or former employer of such employee; or
• Discharge or in any other manner retaliate against any employee or prospective employee because the employee opposed any act or practice made unlawful by the bill.

The Pay Equity for All Act faces an uphill battle. It was referred to the House Committee on Education and the Workforce, where it appears to have stalled.

Are you a New Jersey employer? Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Sean Dias, at 201-806-3364.