New Jersey Minimum Wage Increase – Is It Enough?

New Jersey’s minimum wage is on its way to $15 an hour. But some businesses argue it’s not enough to help their employees make ends meet. NJTV News Anchor Mary Alice Williams recently invited two guests to discuss the issue: New Jersey Working Families Executive Director Analilia Mejia and the president of the New Jersey Business and Industry Association, Michele Siekerka.

What is the minimum wage?

Employers must pay all full-time and part time employees at least the minimum wage. There are some exceptions, including tipped workers (cash wages must equal at least $12 per hour) and certain students enrolled in a training program meeting state standards.

New Jersey’s minimum wage will increase annually based on the rate of inflation as measured by the Consumer Price Index. A bill passed by Governor Phil Murphy in 2019 puts the Garden State on a path to $15 per hour by 2024, but provides seasonal workers, businesses with six or fewer employees, and agriculture employers more time to reach that goal.

Employers are required to keep accurate records of all wages paid to employees. Additionally, all employers must display an approved New Jersey minimum wage poster and other required labor law posters in the workplace, as failure to do so can result in severe fines. An all-in-one payroll and team management solution can help ensure you’re always paying your employees the minimum wage and are in compliance with New Jersey and federal labor laws.

Why is it important?

Despite significant reductions in unemployment, many hardworking New Jerseyans are not earning enough to provide for themselves or their families. This is not sustainable and it hurts the State’s economy.

Raising the minimum wage would help reduce poverty and boost the economy by giving workers more money to spend. This is a solution that should be considered and debated as soon as possible.

In a State where poverty rates lag behind drops in unemployment, it’s time to do what we know works. Leaving anyone out of a wage increase is cruel and unnecessary. Those who rely on tips should be included in the conversation as well.

As a business owner, you likely have questions about how these changes will impact your operations. We encourage you to contact an attorney in our Labor & Employment Group or your Fisher Phillips attorney for more information. To avoid costly mistakes, we recommend reviewing your payroll practices on a regular basis.

How does it work?

New Jersey’s minimum wage increase is a part of a law signed into effect in 2019. It will gradually raise the rate by $1 each year until it reaches $15 an hour. Unlike most other states, New Jersey’s law also includes an annual inflation adjustment.

This first-of-its-kind inflation adjustment will put the state’s minimum wage floor up a few pennies above its original schedule. This may help some low-income residents keep pace with soaring prices, but will not significantly increase their purchasing power.

Employers must comply with the state’s minimum wage laws, as well as all other applicable labor and employment law statutes, such as those addressing employee breaks, paid sick leave and overtime. Businesses should stay current with any changes or updates to the state’s wage and hour rules in order to ensure compliance and avoid costly legal penalties. Fox Rothschild’s national Wage & Hour Department can assist employers with any questions or concerns regarding compliance with New Jersey’s minimum wage laws, as well as the federal Fair Labor Standards Act.

What should we do?

When New Jersey’s minimum wage increases to a new rate of $14 per hour in January, boosted by an inflation adjustment that is the first of its kind, it will help some very low-income residents keep up with rising prices. However, it will not raise their purchasing power past where it was before the increase.

Business organizations such as the New Jersey Business and Industry Association have warned that the increases could force some businesses to cut back on staff, increase prices or even close altogether. If this happens, workers whose rights have been violated may be entitled to recover liquidated damages and other penalties under the state’s robust wage theft laws.

Lawmakers should not carve out any portions of the workforce from a minimum wage increase, including those who rely on tips. Doing so would be a hypocritical move that contradicts the state’s commitment to stamp out pay discrimination and treating women and men equally for their work.