On Thursday, January 24, 2019, the New Jersey Assembly Labor Committee approved a bill (A 15) that, if passed by the legislature, would incrementally raise New Jersey’s minimum wage to $15 per hour for most workers by 2024. If effected, this bill will make New Jersey the fourth state in the nation to commit to a gradual minimum wage hike to $15, joining Massachusetts, California, and New York. While the bill still requires approval by both houses of the state legislature and signature by Governor Murphy, prospect of passage is high in light of Democratic control of both houses and the Governor’s stated support of the initiative.
The bill sets forth the following schedule for the gradual minimum wage increase: $10.00 per hour on July 1, 2019; $11 per hour on January 1, 2020; $12 per hour on January 1, 2021; $13 per hour on January 1, 2022; $14 per hour on January 1, 2023; and $15 per hour on January 1, 2024. Wages would then continue to increase in accordance with the consumer price index for all urban wage earners and clerical workers (CPI-W), as calculated by the federal government.
Several exceptions have been negotiated into the current version of the proposed bill:
In summary, the proposed bill would increase wages as follows:
Small Employers & Seasonal Workers
July 1, 2019
January 1, 2020
January 1, 2021
January 1, 2022
January 1, 2023
January 1, 2024
January 1, 2025
January 1, 2026
$13.50 + CPI-W
The bill also proposes tax credits for businesses that hire employees “whose work capacity is significantly impaired by age or physical or mental deficiency or injury,” with the purpose of helping to “offset the cost to the employer of any wage increases for those employees caused by” the enactment of the bill.
These significant increases in the New Jersey minimum wage would not only affect the wages of employees currently paid at minimum wage, but should also be expected to have a ripple effect on the wages of supervisory and non-exempt employees with hourly rates above the minimum wage. Employers should begin to examine their pay practices for non-exempt employees to determine who may be affected by the wage increase, and consider what changes, if any, to business practices (including potential staffing or scheduling reductions) may be appropriate to absorb this increased labor cost.
Employers should keep in close contact with employment counsel as the legislative vote, and any subsequent implementation date, approaches.