New Jersey Law Journal

Bill to Prohibit Employers From Asking About Past Salary Becomes Law

Sponsors said the new law seeks to close the significant wage gap between women and men and would prohibit employers from requiring job applicants to disclose their past salary, benefits and other compensation in the application process.

New Jersey Law Journal — July 26, 2019

By Suzette Parmley, New Jersey Law Journal

A bill aimed at strengthening equal pay protections for state workers by prohibiting discrimination based on past salary was signed into law by acting Gov. Sheila Oliver.

Sponsors said the new law, signed on July 25, seeks to close the significant wage gap between women and men and would prohibit employers from requiring job applicants to disclose their past salary, benefits and other compensation in the application process.

The former bill, A-1094, complements the Diane B. Allen Equal Pay Act, which became effective earlier this year, to ensure equal pay to all employees for equal, or "substantially similar," work.

The EPA amended the New Jersey Law Against Discrimination, N.J.S.A. 10:5-12. It broadens the prohibition against pay discrimination because, or on the basis, of an employee's inclusion in any protected class.

The more recent A-1094 legislation was first introduced in January 2018, and passed the labor committees of both houses this year. It passed the full Assembly in March by a 53-24 vote, and the Senate by a 26-9 vote last month.

In Gov. Phil Murphy's first official act after being sworn in to office in January 2018, he signed an executive order combating gender inequality and promoting equal pay for women in New Jersey by banning this discriminatory practice in state government of screening applicants based on their past salaries and benefits.

Under the new law:

Punitive damages, a standard remedy for violations under the LAD, would not be available for violations falling under the new law.

"I am proud to sign this bill today for our women, children and families, which will institute this policy as state law, and put an end to this discriminatory workplace practice once and for all," Oliver said in a statement.

She said the new law is designed to ensure that employees in the state receive salaries that are commensurate with their skills, qualifications and experience.

"The Equal Pay law is another major victory for women, minorities and working families seeking economic security," said Dena Mottola-Jaborska, associate director of New Jersey Citizen Action, a statewide grassroots organization based in Newark. "Last year's landmark Diane B. Allen Act sent a strong message to New Jersey employers that there would be dire consequences for discriminatory behavior against people of color and women.

"But wage discrimination is a pervasive enough problem that it will require multiple solutions to eliminate it," Mottola-Jaborska said. "The bill signed today could have an even greater impact as it gives each and every person the ability to escape past wage discrimination and ensures it doesn't follow them throughout their careers. It will allow experienced workers to reset their careers and ensures fairness for those just entering the workforce."

According labor studies, the wage gap between Latina women and white men in New Jersey is the largest in the nation. Based on research from the National Partnership for Women and Families, wage inequality leads to a combined loss of $32.5 billion in the state every year.

"In an ideal world, your gender would not influence how much you earn at work, but that's not the world we live in," said Joann Downey, D-Monmouth, a prime sponsor. "Pay equity might be the law of the land in New Jersey, but we need a tool to properly enforce it.

"By banning questions about salary history, we can wipe away a history of bias and implicit discrimination, allowing women to start fresh with the compensation that they truly deserve," added Downey.

Assemblywoman Pamela Lampitt, D-Camden, also a sponsor, said the new law would help level the playing field.

"Though equal pay was made law in New Jersey earlier this year, this law will take further steps towards leveling what was an unacceptably skewed playing field," Lampitt said.

Under the NJLAD, an employee is entitled to an award of compensatory damages, punitive damages if the conduct is willful, attorney fees and costs. Under the Diane B. Allen Equal Pay Act, a prevailing employee will be awarded treble damages in addition to the damages available under the NJLAD.

Furthermore, the EPA extends the statute of limitations for a discriminatory pay practice from two years to six years, thus expanding the reach of either the federal EPA or NJLAD.

In addition to prohibiting employers from screening a job applicant based on his or her salary history, the new law also makes it unlawful for an employer to require an applicant's past wages and benefits to satisfy any minimum or maximum criteria.

"This is about equity and fairness," said bill sponsor Gary Schaer, D-Bergen. "Under the protections imposed by this law, employers will have to make their salary decisions based on what an applicant's worth is to the company, rather than on what he or she made in a previous position."

Assemblyman Dan Benson, D-Mercer, said a woman working full time, year-round, earns $10,800 less per year than a man, based on median annual earnings.

"This disparity can add up to nearly a half million dollars over a career, and have immediate, as well as lasting, effects," Benson said.

"We've made great strides to ensure pay equity in New Jersey," said Paul Moriarty, D-Camden. "With the passage of this law, we are another step closer to securing workers' rights to equal pay for equal work for generations to come."

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