Salary History Ban in New Jersey: What Employers Can Ask

Federal law does not prohibit employers from asking about salary history. However, the Equal Employment Opportunity Commission (EEOC) has taken the position that relying solely on salary history in determining pay may perpetuate gender-based and race-based pay discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, when such reliance has a disparate impact on protected classes.

The federal baseline provides limited protection through disparate impact theory, meaning an employer could potentially face liability if their salary history practice disproportionately affects women, minorities, or other protected groups. However, this requires proving the statistical impact of the practice.

Federally, there is no affirmative ban on asking salary history questions. The EEOC enforces Title VII but has not issued binding regulations prohibiting salary history inquiries outright. This leaves significant gaps in federal protection, making state laws like New Jersey's Pay Transparency Act essential for worker protection.

New Jersey's Pay Transparency Act (N.J.S.A. 34:37-14 and 34:37-15) provides substantially stronger protections than federal law by creating an absolute prohibition on salary history inquiries.

Under the New Jersey statute, employers are prohibited from asking job applicants, directly or indirectly, about their compensation history, including salary, benefits, bonuses, or other compensation paid by current or former employers. The law covers all employers operating in New Jersey, with no employer-size exemption. This is broader than federal law, which contains thresholds (15 employees for Title VII) that do not apply here.

A key distinction is that New Jersey's law does not require proof of discriminatory intent or disparate impact. Instead, it creates a strict liability standard: simply asking the question or using salary history violates the law. The statute also prohibits making a job offer contingent upon disclosure of salary history or using salary history as the basis for setting wages.

New Jersey law further provides that applicants may voluntarily disclose salary history, and if they do so, employers may consider this information. However, employers cannot solicit or require such disclosure. Additionally, the law permits employers to conduct employment history verification, including confirming dates of employment and job titles—they simply cannot inquire about compensation.

Remedies under New Jersey law include civil penalties of up to $1,000 per violation, payment of attorney fees and costs to the prevailing party, and potentially additional damages if discrimination can be proven. Enforcement occurs through the New Jersey Department of Labor, which has dedicated authority under the statute.

The salary history ban has limited exceptions, making it one of the strictest such laws in the United States. Employers may conduct background checks and verify employment history, including job titles and dates of employment, without violating the law—they simply cannot ask about compensation amounts.

If an applicant voluntarily and without prompting discloses their salary history, an employer may consider this information in determining compensation. However, the employer cannot solicit, request, or encourage this disclosure. The burden is on the employer to refrain from asking, even indirectly.

One potential exception involves internal employees being promoted or transferred within the same company. Some states with salary history bans exempt internal job promotions from the ban because the employer already knows the employee's current compensation. However, New Jersey case law is limited on this point, and the safest interpretation of N.J.S.A. 34:37-14 is that the ban applies to all applicants, including internal candidates, though an employer may already possess compensation information for current employees through normal payroll records.

Employers can also rely on market-rate studies and comparable-worth analyses that do not reference the individual applicant's salary history. The law does not prevent using industry surveys or wage benchmarks; it only prohibits using the specific applicant's past compensation.

At-will employment is not affected by the salary history ban. Employers retain the right to terminate employment for non-discriminatory reasons unrelated to salary history inquiries. Additionally, the salary history ban is separate from and does not preempt New Jersey's pay equity law (N.J.S.A. 34:37-1), which requires substantially equal pay for substantially similar work regardless of gender or protected status.

Union employees and collective bargaining agreements are not exempt from the salary history ban, though union negotiations may address compensation determination methods separately.

Step 1 — Document the Violation: Keep detailed records of when and how the employer asked about your salary history. This can include written job applications with salary history fields, emails requesting wage information, phone call notes (with dates and times), LinkedIn messages, or information provided by recruiters. Save the original job posting if it requested salary history. Document the name of the person who asked (hiring manager, HR representative, recruiter), the date and method of contact, and exactly what was asked. If the question was indirect—such as 'Tell us about your current compensation package' or 'What are you currently earning?'—note the exact wording. Keep copies of all communications and write down details immediately after the conversation occurs to ensure accuracy.

Step 2 — Understand Your Internal Options: Before filing a formal complaint, consider whether to notify the employer's human resources or compliance department. Many New Jersey employers are aware of the Pay Transparency Act and may view the violation as an unintentional mistake by a recruiter or manager unfamiliar with the law. Sending a written email to HR, referencing the specific statute (N.J.S.A. 34:37-14), describing what happened, and requesting confirmation that the employer will not ask salary history questions in the future can sometimes resolve the issue. Keep a copy of this communication. However, this step is optional—you have the right to proceed directly to the Department of Labor without attempting internal resolution. Note that complaining internally does not restart your statute of limitations clock (you still have 2 years from the violation date to file formally), but documentation of your internal complaint can strengthen your case if you later file with the state.

Step 3 — File a Complaint with the New Jersey Department of Labor: The New Jersey Department of Labor enforces the Pay Transparency Act and salary history ban. You can file a complaint through the Division on Civil Rights within the Department of Labor, or you may file directly with the New Jersey Department of Labor Wage & Hour Enforcement Division. The preferred method is to file with the Division on Civil Rights if the violation involves potential discrimination or if you believe you were not hired because you refused to disclose salary history. Visit the New Jersey Department of Labor website (nj.gov/labor) and locate the complaint filing portal. You can file online, by mail, or by phone. Include your full name, contact information, the employer's name and address, the date of the violation, a detailed description of what the employer asked or required, the name of any person who made the request, and any documents you have (emails, application forms, job postings). Include copies of your salary history documentation. The filing deadline is 2 years from the date the violation occurred. There is no filing fee. After filing, you will receive a case number and confirmation. Processing typically takes 30-60 days for initial review, though complex cases may take longer.

Step 4 — Expect the Investigation Process: After filing, the Department of Labor will send a notice to the employer informing them of the complaint and requesting their response. The employer typically has 10-15 business days to respond. You may be contacted by an investigator from the Department of Labor who will ask detailed questions about the violation and request additional documentation. The investigator will also contact the employer and may request employment records, job applications, email correspondence, recruiter communications, and hiring notes. The investigation phase typically lasts 30-90 days. Once the investigation is complete, the Department of Labor will issue a determination stating whether a violation occurred. If a violation is found, the Department can order the employer to cease the conduct, pay civil penalties (up to $1,000 per violation), pay your attorney fees and court costs if you retained counsel, and potentially provide other remedies such as job offer reconsideration or compensation adjustment. You will receive a written determination and be informed of your right to appeal or pursue further action. If the Department does not find a violation, you may request reconsideration or consult an attorney about your options.

Step 5 — When to Consult an Employment Attorney: You should consult an employment law attorney if: the employer refuses to comply with the Department of Labor's determination, you believe you suffered damages beyond civil penalties (such as loss of a job offer or lower wages due to salary history disclosure being used), you want to file a private civil lawsuit in addition to or instead of the Department of Labor complaint, the violation involves multiple applicants (suggesting a pattern and practice by the employer), or you were terminated or faced retaliation after complaining about the salary history inquiry. An attorney can help you assess whether to pursue state court litigation for actual damages, attorney fees, and costs. Many employment attorneys in New Jersey work on contingency for Pay Transparency Act violations, meaning you pay no upfront fees. Look for attorneys licensed in New Jersey with experience in employment discrimination and wage law.