On July 25, 2019, New Jersey enacted a law banning salary history inquiries, joining 18 other states in doing so, including New York and many municipalities.

The law, NJA1094, becomes effective on January 1, 2020. The law prohibits New Jersey employers from inquiring about an applicant’s salary history in the application process or using an applicant’s refusal to provide salary history in the hiring process. The law also prohibits an employer from setting certain minimum or maximum salary history criteria and proscribes consideration of a refusal to provide any such salary history information as a factor in any new employment decision.  It is only after a conditional offer of employment is made, and provided that the employer first provides an “explanation of the overall compensation package,” that an  employer may confirm an applicant’s salary history, including by requiring a background check.

If an applicant voluntarily offers salary history, the law allows the employer to consider same.   Employers may also ask an applicant his/her salary “expectations,” but should be cognizant of the fact that basing one’s salary on prior compensation could expose the employer to equal pay issues and potential claims under the Diane B. Allen Equal Pay Act.

Employers who operate in multiple states may include a salary history inquiry on the employment application provided that the application clearly states that applicants who will be working in New Jersey should not answer the question.

The law also amends the New Jersey Law Against Discrimination (“NJLAD”) to make it a violation of the NJLAD to screen an applicant based on salary history or request that a salary history satisfy any minimum or maximum criteria.

An employer who violates the law will be subject to civil penalties.

New Jersey employers should immediately review their hiring processes to ensure compliance with this new law.

In an update with respect to perhaps one of the most important and far-reaching appellate decisions on website accessibility cases filed by legally blind or visually impaired plaintiffs pursuant to the Americans with Disabilities Act (ADA), Domino’s Pizza, less than two months ago, filed a petition for writ of certiorari with the United States Supreme Court, asking the nation’s High Court to review and reverse the decision of the United States Court of Appeals for the Ninth Circuit in the case of  Robles v. Domino’s Pizza, Case No. 17-5504.

In Robles, the trial court had dismissed the plaintiff’s claim that Domino’s had failed to construct, design, maintain and operate both its website as well as its mobile application so that he, as a blind man, could fully access that website and application.  The trial court, relying upon the failure of the United States Department of Justice to promulgate regulations and provide any meaningful guidance with respect to the issue, concluded that application of the ADA to Domino’s mobile application and website violated due process rights of the company.  The Ninth Circuit, however, reversed, holding that there was no violation of due process rights and remanded the case back to the trial court to determine whether Domino’s mobile application or website complied with the ADA.

In its 35-page petition for certiorari, filed on June 13, 2019, Domino’s presented the question for the Supreme Court’s determination as follows:  “Whether Title III of the ADA requires a website or mobile phone application that offers goods or services to the public to satisfy discrete accessibility requirements with respect to individuals with disabilities?”

With the number of ADA website accessibility cases continuing to sharply rise—some might use the term explode—particularly in states like Florida and New York, and no decision yet from the United States Court of Appeals for the 11th Circuit in Gil v. Winn Dixie, the only known ADA website accessibility case to actually go to trial, if the United States Supreme Court accepts review of the Robles v. Domino’s Pizza, perhaps clarity can finally be brought to the issue of the application of the ADA to websites.  The Supreme Court, however, is not required to accept review of the case although it will generally make its decision on whether to do so fairly quickly.

Recently, Governor Andrew Cuomo signed two significant bills expanding the scope of anti-discrimination laws in the New York workplace. Specifically, on July 10, 2019, Governor Cuomo signed Senate Bill 6549, prohibiting employers from inquiring about applicant and employee salary history, and Senate Bill 5248B, expanding pay protections under the New York Equal Pay Act.

Expansion of Equal Pay Protections

The recently enacted New York Senate Bill 5248B, which goes into effect on October 8, 2019, expands anti-discrimination protections under the New York Equal Pay Act by mandating equal pay among all protected categories under the New York State Human Rights Law – not just sex. Specifically, employers may not pay an employee who is a member of a protected class less than an employee outside of the same protected class in the same establishment for: (a) equal work performed under similar working conditions and on a job requiring equal skill, effort, and responsibility or (b) substantially similar work, when considering skill, effort, responsibility, and working conditions. Indeed, these equal pay protections now apply to the protected categories of age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, or domestic violence victim status, or other status protected by law.

The new law contains the previously enacted permissible factors for wage differentials, which are compensation differences based on a: (a) seniority system; (b) merit system; (c) system which measures earnings by quantity or quality of production; or (d) bona fide factor other than the protected status, such as training, experience, or education. The employer, however, must be able to demonstrate that the bona fide factor is job-related, consistent with business necessity, and cannot be based upon or derived from a pay differential based on status within a protected class.

According to the current state of the law, which Senate Bill 5248B confirms, an employee may still prevail on a discrimination claim when he or she demonstrates that: (a) the employer’s practice causes a disparate impact on the basis of status within one or more protected class or classes; (b) an alternative employment practice exists that would serve the same business purpose and not produce such a pay differential; and (c) the employer refused to adopt such alternative practice.

Importantly, an employee bringing such a suit can currently seek liquidated damages of up to 300% of unpaid wages for willful violations, as well as the ability to recover attorneys’ fees. The new law also authorizes the New York Department of Labor to assess penalties for pay inequities among protected classes of up to $500 per violation.

As a result of the passage of this law, New York employers should review their compensation and benefit programs to assess whether any potentially improper pay differentials exist. If any differentials exist, employers should be prepared to justify the differential among employees performing equal or substantially similar work. Employers should contact counsel with any questions or if any assistance is needed in conducting pay equity audits.

Salary History Inquiry Ban

Pursuant to New York Senate Bill 6549, which will take effect on January 6, 2020, employers of all sizes are prohibited from:

  • Relying on the wage or salary history of a job applicant in determining whether to offer employment or in determining the wages or salary of such applicant;
  • Orally or in writing, seeking, requesting, or requiring the wage or salary history from an applicant or current employee as a condition to be interviewed, or as a condition of continuing to be considered for an offer of employment, or as a condition of employment or promotion;
  • Orally or in writing, seeking, requesting, or requiring the wage or salary history of an applicant or current employee from a current or former employer, current or former employee, or agent of the applicant or current employee’s current or former employer;
  • Refusing to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current employee based upon prior wage or salary history;
  • Refusing to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current employee because such individual did not provide wage or salary history in accordance with the law; and
  • Refusing to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current or former employee because the individual filed a complaint with the New York Department of Labor alleging a violation of the law.

Notably, the law contains carve outs for the following disclosures:

  • Applicants and current employees are permitted to voluntarily, and without prompting, disclose or verify their salary history, including for the purposes of negotiating compensation; and
  • Employers may confirm wage or salary history if at the time an offer of employment with compensation is made, the applicant or current employee responds to such offer by providing prior wage or salary information to support higher compensation than what was offered by the employer.

The law specifically states that it shall not be interpreted to take away any right or remedy of any applicant or current or former employee under any other law, collective bargaining agreement, or employment contract. The law explicitly also provides that it does not supersede any federal, state, or local law that was enacted prior to the effective date of the law that requires the disclosure or verification of salary history to set an employee’s compensation.  This is significant because, as we previously reported, salary history inquiry laws have been passed in New York City, Suffolk County, Westchester County, and Albany County.  That being said, Westchester County’s law will be void on the effective date of Senate Bill 6549 because the Westchester County law provides for nullification upon the effective date of statewide legislation.

The law provides legal remedies to individuals seeking redress for any violation of this law and the ability to bring a civil action on behalf of similarly situated persons. Employers who violate this law may be liable for injunctive relief, compensatory damages, and reasonable attorneys’ fees.

On April 25, 2019, Judge Tanya Chutkan of the United States District Court for the District of Columbia ruled in National Women’s Law Center et al v. Office of Management and Budget et al., Civil Action No. 17-cv-2458 (D.D.C.) (“National Women’s Law Center”) that employers subject to Equal Employment Opportunity Commission (“EEOC”) EEO-1 reporting requirements (employers with more than 100 employees and federal contractors with 50 or more employees with a federal contract, subcontract or purchase order exceeding $50,000) must provide employee pay equity data (“Component 2” information) for fiscal years 2017 and 2018 by September 30, 2019.

Subject employers have had to provide data on gender, race, ethnicity, etc. (“Component 1” information) for over 50 years.  In 2016, the Obama Administration ruled that employers would also have to provide summary pay equity data, which is expected to include the number of employees in each pay band listed on the EEO-1 form. In August 2017, the Trump Administration’s Office of Management and Budget (“OMB”) stayed this requirement after concluding that the update would be “unnecessarily burdensome.”  Various advocacy groups sued, leading to the above-referenced court decision.

At this point, subject employers must provide 2017 and 2018 Component 2 information by September 30, 2019.  The EEOC has indicated that it will make the Component 2 portal available to all employers by mid July 2019, at which time the EEO-1 Component 2 Survey will be presented.  Although employers should note that the Department of Justice filed a Notice of Appeal in National Women’s Law Center on May 3, 2019, this appeal does not stay the district court’s order and employers should begin gathering Component 2 information.

On March 1, 2019, New Jersey became the first state to enact legislation, Senate Bill No. 1567 (“An Act concerning pre-tax transportation fringe benefits”), requiring employers with 20 or more employees to offer pre-tax transportation benefits (“NJ Transit Law”).  The significance of this New Jersey legislation is that the state is requiring employers to offer a fringe benefit to employees that, starting in 2018, has lost its federal tax benefit for employers under the 2017 Tax Cuts and Jobs Act (“TCJA”).

Federal law allows an employee to set aside pre-tax wages that can only be used for the purchase of certain eligible transportation services.  Such “qualified transportation fringes,” as defined under Section 132(f) of the Internal Revenue Code, include cost of transit passes, commuter vehicle travel, qualified parking and qualified bicycle commuting up to a monthly limitation of $265 in 2019, subject to cost-of-living adjustments.

Before the enactment of the TCJA, the cost of the benefit was deductible by the employer (i.e., reducing its overall income in a given year) and was also not taxable as income to the employee.  With the enactment of the TCJA, effective January 1, 2018, while the benefit is still not treated as income to the employee, now the employer’s cost of offering such benefit to the employee cannot be deducted from the employer’s annual income.

This reversal of the federal tax benefit would have a chilling effect on any employer previously motivated by the federal tax break to offer fringe transportation benefits.  The New Jersey Legislature has stepped in to make offering such benefits mandatory for employers of a certain size, despite the less favorable tax treatment under federal law.

“Employee” and “employer” are defined under the NJ Transit Law as under the “unemployment compensation law,” (R.S.43:21–1 et seq.).  For unemployment benefit purposes, an “employer” is any for-profit or non-profit entity which has one or more individuals paid at least $1,000 in a calendar year.  An “employee” refers to anyone who provides paid-for services to an “employer,” unless the employer can demonstrate that the individual is an independent contractor under the “ABC test.”  Generally, under the “ABC test,” an individual does not qualify as an “employee” if: (a) the individual is free from the employer’s control or direction over the performance of the work; (b) the work is either outside the usual course of the employer’s business or is performed outside of all of the employer’s places of business; and (c) the individual is customarily engaged in an independently established occupation or business. R.S. 43:21-19(i)(6).

The NJ Transit Law only requires the employer to offer benefits related to transit passes and commuter vehicles, and not qualified parking or bicycles.  It also does not apply to employees covered by a collective bargaining agreement until the expiration of an existing agreement.  The bill provides for a public awareness campaign by the New Jersey transit authorities about the new law.

The penalty to an employer for failure to comply with the NJ Transit Law is $100 – $250 for a first-time violation, with a 90-day grace period to cure.  After 90 days, each additional 30 day period of violation is subject to a $250 penalty.  Costs of recovery and interest may also be charged.

The good news for employers is that the new law, while effective immediately, remains inoperative for a year from March 1, 2019 while the Commissioner of Labor and Workforce Development adopts rules and regulations for administration and enforcement.  During this waiting period until March 1, 2020, employers should be gearing up to comply with the new transportation fringe benefit rules in New Jersey.