As he promised, Governor Phil Murphy signed into law a bill that will raise New Jersey’s minimum wage from $8.85 to $15 per hour for most minimum wage workers in the State.
Absent an exception, the increases will take effect as follows:
For most New Jersey minimum wage workers, the minimum wage will increase to $10 per hour on July 1, 2019 – and then increase by $1 per hour on January 1 of every subsequent year, until the minimum wage reaches $15 per hour on January 1, 2024.
For "seasonal" employees or those who work for "small" employers (as these terms are defined in the statute), the increases begin on January 1, 2020, when the minimum wage will increase to $10.30 per hour. The minimum wage for such workers will increase each year thereafter until it reaches $15 per hour on January 1, 2026.
For agricultural workers, the minimum wage is set to reach $12.50 by 2024, with an opportunity for state officials to later agree to bring such workers up to $15 by 2027.
For tipped workers, the new law changes the “tip credit” that employers may take against the rising minimum wage rate. Currently, employers must pay New Jersey tipped employees a base rate of only $2.13 per hour, assuming the employee makes enough in tips to bring their pay up to the regular minimum wage. Under the new law, the required base rate will increase gradually – to $2.63 per hour on July 1, 2019 and upwards in stages until it reaches $5.13 per hour on January 1, 2022.
Also, commencing on January 1, 2020, employers will have the option of paying a “training wage” (not less than 90 percent of the minimum wage) to an employee who is enrolled in an employer’s qualified training program. However, employers may only pay such decreased wages for the first 120 hours of an employee’s work and only if the employee had no previous experience in the field.
Employers are encouraged to promptly review the new law and any wage schedules that may impact their workforce. If you have any questions, please contact us to discuss.