New Jersey lawmakers want to outlaw salary histories

“Hiring practices that take into consideration an applicant’s past salary only perpetuate the disparities that exist.”

New Jersey State Senators Nia H. Gill, right, and Loretta Weinberg, left. CREDIT: AP Photo/Julio Cortez
New Jersey State Senators Nia H. Gill, right, and Loretta Weinberg, left. CREDIT: AP Photo/Julio Cortez

Two New Jersey state senators think that banning employers from asking about job applicants’ salary histories could bring the state one step closer to closing unfair wage gaps based on gender or race.

Women in New Jersey make about 70 percent of what male residents make. Women of color make even less: black women in New Jersey make just under 60 percent of what white men make, while Hispanic women make about 44 percent.

A bill introduced recently by Democrats Nia H. Gill and Leader Loretta Weinberg would bar employers from asking prospective employees to provide information about their past or current wages. Employers would also be kept from screening out applicants based on their current pay or to relying on it to come up with a salary offer.

Employers often ask job applicants or prospective employees for information on their past compensation during the hiring process, usually as a way to gauge how much they should pay someone or whether they can afford to hire that person at all.

But this process can shortchange those who may be paid less thanks to discrimination. Research that has shown that women start their careers facing a wage gap: even when they are fresh out of college and enter their first jobs, they make less than men with the same credentials. That gap continues to follow them no matter what job they take or if they get higher degrees, and it grows the older they get.

So if an employer bases an incoming woman’s salary on what she made at her job before, any potential discrimination she may have experienced previously will keep getting baked in and potentially compounded.

“Unfortunately, hiring practices that take into consideration an applicant’s past salary only perpetuate the disparities that exist,” Gill said in a press release announcing the legislation. “Eliminating salary history as part of the discussion so that businesses are more inclined to assess candidates based on their education, experience, and knowledge of the job is one way to help create wage fairness in New Jersey.”

“Salaries should be based on an applicant’s qualifications, not their past wages,” Weinberg told the Observer. “A job candidate’s past salary is not only irrelevant, but could continue wage discrimination an employee suffered in previous jobs.”

The bill takes another step intended to level the playing field for those who might be discriminated against: banning employers from retaliating against employees who disclose their own compensation information to coworkers. While all workers should have the right to discuss their pay with each other, many say they are penalized for doing so.

Yet transparency is a key tool for women and people of color who want to uncover any potential unfair wage gaps. In the federal government or unionized workplaces, where pay scales tend to be a lot more transparent, the gender wage gap is far smaller and has been shrinking, while the overall gap has mostly stayed stuck where it is.

The idea of banning salary histories is relatively new — only one place, Massachusetts, has actually passed a bill instituting such a policy — but has quickly caught on in recent months. After Massachusetts lawmakers passed their bill, legislation has been introduced in New York City, Washington D.C., and even in Congress.