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Employment Discrimination Based on Salary History in New Jersey

The New Jersey Law Against Discrimination (NJLAD) bars employers from discriminating against employees and job applicants on the basis of many different factors. Despite these protections, ongoing inequalities continue to create disadvantages for many people. The use of salary history is one way that employers might — even unintentionally — perpetuate systems of discrimination. The New Jersey Legislature amended the NJLAD and other areas of state law a few years ago to address this concern. The new law limits how employers may use salary history in the hiring process with regard to members of any “protected class” under the NJLAD. If you feel you have been discriminated against over salary history issues, it would be a good idea to consult with a New Jersey employment discrimination lawyer.

Protected Classes Under the NJLAD

Section 11(a) of the NJLAD identifies eighteen protected classes. These include race, sex, religion, national origin, pregnancy, disability, ongoing military service, age, sexual orientation, and gender identity and expression. Employers may not discriminate on the basis of any of these factors.

Unequal Pay Under the NJLAD

In § 11(t), the NJLAD specifically addresses unequal pay. It prohibits employers from paying employees who belong to a protected class less than other employees.

Exceptions to this section are possible if the employer can show that the disparities in pay are based on a system of seniority or merit, or that they are “based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class.” The employer must show that these factors are “applied reasonably,” and that they do not perpetuate different rates of pay based on any protected factor.

Salary History as a Source of Employment Discrimination

On average, several gaps exist in wages between employees of different genders, races, and other factors. A September 2021 report from the Pew Research Center found that, after increasing in 2020, income inequality has mostly returned to pre-pandemic levels. The report compared median hourly wages based on gender and race, and found that:
– Female employees earn 83.3 percent of what male employees earn;
– Black employees earn 74.9 percent of what white employees earn;
– Hispanic employees earn 72.8 percent of what white employees earn; and
– Asian employees earn 129 percent of what white employees earn.

The use of salary history during the hiring process can perpetuate pay disparities, even when no one acts with any discriminatory intent. If a woman has made 83 percent of what a man with identical qualifications has made, and an employer bases their new wage or salary on what they have made in the past, the disparity in pay could continue throughout their careers. Many employment antidiscrimination laws are seeking to address this.

New NJLAD Protections

The new law passed by the state legislature in 2019 added new sections to the NJLAD and the Labor and Workmen’s Compensation Code. Employers may not “screen a job applicant based on the applicant’s salary history,” nor may they set “minimum or maximum criteria” for salary history.

These restrictions only apply to new hires, not promotions within a company. Employers may consider salary history if a job applicant voluntarily provides them with that information, or authorizes them to obtain it from previous employers.

If you and your employer are involved in a dispute in New Jersey or New York, the employment lawyers at the Resnick Law Group can answer your questions and discuss your options. Please contact us online, at 973-781-1204, or at 646-867-7997 today to schedule a confidential consultation with a member of our knowledgeable and skilled team.

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