Executive Summary: New Jersey Governor Chris Christie has conditionally vetoed a $1.25 minimum wage hike, instead proposing a $1.00 increase that will phase in over three years.
Governor Christie conditionally vetoed a bill (A-2162/S-3) that would have raised the state's minimum wage rate from $7.25 per hour to $8.50 per hour (behind only Washington and Oregon). The bill also would have tied automatic annual increases to the federal Consumer Price Index (CPI). Instead, Governor Christie proposed an $8.25 per hour minimum wage rate, phased in over the next three years, and rejected tying the minimum wage to the CPI.
The Governor's conditional veto contains the following elements:
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Replaces the proposed $8.50 minimum wage increase with an $8.25 minimum wage rate. The increase would be phased in over three years, beginning in March 2013. In 2013, the minimum wage rate would increase 25 cents; in 2014, the rate would increase 50 cents; and in 2015, it would increase by another 25 cents.
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Removes the provision tying minimum wage rate increases to the CPI.
Additionally, the Governor's conditional veto would increase the Earned Income Tax Credit, effective January 1, 2014. The tax credit would increase from 20 to 25 percent.
The bill's sponsors, Assembly Speaker Sheila Oliver and Senate President Stephen Sweeney, rejected the Governor's changes. They indicated that the Legislature will push for a referendum on the November ballot. "We just need a simple majority of votes out of the Assembly and the Senate, which we know we will have," Oliver said in a statement.
What Does this Mean for Employers?
New Jersey employers should expect an increase in the minimum wage rate, whether it is a gradual increase as proposed by Governor Christie or the 17% increase proposed by lawmakers. During a time when businesses are still struggling, an increase in the minimum wage rate could have profound and lasting effects on the state economy.
We will continue to keep you updated on the status of this legislation. If you have any questions regarding this Alert or other labor or employment related issues, please contact the authors, Salvador Simao, ssimao@fordharrison.com, or Joanna Rich, jrich@fordharrison.com, both of whom are attorneys in our Berkeley Heights office, or the FordHarrison attorney with whom you usually work.
