New Jersey Enacts Law Increasing Minimum Wage

On February 4, 2019, Governor Phil Murphy signed a law which will gradually increase New Jersey’s minimum hourly wage to $15/hour for most New Jersey employees by January 1, 2024. The first increase, which will not take effect until July 1, 2019, will increase the minimum wage from $8.85/hour (the rate currently in effect as of January 1, 2019) to $10/hour, but only for employers with six or more employees. The next increase for employers with six or more employees, to $11/hour, will take place on January 1, 2020. The first increase for small businesses (defined as employers with fewer than six employees) will take effect on January 1, 2020, when the minimum wage rate for those employees will rise to $10.30/hour. Different rates will apply to certain other employees, such as seasonal and agricultural employees.

The text of the bill signed by Governor Murphy can be found here.

Beginning on January 1, 2021, the statewide minimum wage for employers with six or more employees will increase by $1 per hour every January 1st until it reaches $15 per hour on January 1, 2024.  To help soften the immediate impact on smaller employers, the minimum wage rate for small businesses will not reach $15/hour until January 1, 2026.

For tipped employees, who must earn at least the minimum wage through a combination of tips and salary, the current floor of $2.13/hour will be increased to $2.63 effective July 1, 2019, and then to $3.13 effective January 1, 2020, along with increases in the “tip credit” (the amount employers are allowed to deduct from the applicable minimum wage).

The law also establishes a new “training wage” effective January 1, 2020, which is equal to at least 90% of the minimum wage ($9.90/hour for 2020), which would be in effect for the first 120 hours of work by people enrolled in a training program. To quality for the lower rate, the training program must meet standards to be established by the New Jersey Commissioner of Labor and Workforce Development.

The minimum rate increases are different for employees employed by a “seasonal employer” and for agricultural employees. Please contact us if you need additional information regarding seasonal or agricultural employees.  

The following chart outlines the increases scheduled under the New Jersey law. If at any time the federal minimum wage rate is higher than the New Jersey rate, the federal rate will apply. Beginning in 2025, the minimum rates noted below are also subject to increases based upon any increase in the consumer price index for all urban wage earners and clerical workers (referred to as the “CPI-W”), as calculated by the federal government.

.

The above increases will not apply to part-time in-home babysitters, persons under the age of 18 working without a vocational certification, outside salespersons, automobile salespersons, and non-profit or religious volunteers participating in county or agricultural fairs.

As previously reported here, New York’s minimum wage is also scheduled to gradually increase to $15/hour. California, Massachusetts and Washington, D.C. have also enacted legislation gradually increasing the minimum wage to $15/hour and other states may soon follow.

Please do not hesitate to contact any of our wage and hour attorneys if you have any questions regarding these changes.