United States: $15 Minimum Wage Becomes Law In New Jersey

New Jersey has joined the ranks of California, New York, Massachusetts, and Washington D.C. in adopting legislation that will gradually increase the state's minimum wage to $15 an hour for most employees. The legislature passed the bill on January 31, and Governor Phil Murphy signed it into law yesterday. Here's what New Jersey employers should know about it.

Required Minimum Wage Rates

In 2013, New Jersey voters approved an amendment to the state constitution requiring an increase to the state's minimum wage each year on January 1 to match the greater of any increase in the CPI-W (the consumer price index for urban wage earners and clerical workers) during the 12 months ending the preceding September, or the federal minimum wage, if it exceeded New Jersey's. As a result, New Jersey increased its minimum wage to $8.85 an hour on January 1, 2019, based on the previous year's CPI-W increase.

The new Minimum Wage Law surpasses that system by mandating the following minimum hourly pay rates, unless the change in the CPI-W would result in a greater increase or the federal minimum wage is higher: 

  • $10 effective July 1, 2019;
  • $11 effective January 1, 2020;
  • $12 effective January 1, 2021;
  • $13 effective January 1, 2022;
  • $14 effective January 1, 2023; and
  • $15 effective January 1, 2024.

After 2024, the minimum wage will only increase if it needs to keep pace with any increase to the CPI-W or the federal minimum wage.

For those working for small employers (defined below), and for non-tipped employees engaged in seasonal employment (defined below), the 2019 minimum wage of $8.85 an hour will increase to $10.30 on January 1, 2020, and then by 80 cents an hour each year from 2021 to 2025, and 70 cents an hour in 2026, eventually bringing the minimum hourly wage to $15. From 2027 to 2028, the wages of these employees will increase under a formula to match the general minimum wage by 2028. Special rules apply to farm labor.

For tipped employees, the Minimum Wage Law will permit employers the following tip credits against the general minimum wage: $6.72 per hour from January 1, 2019 to June 30, 2019; $7.37 per hour from July 1, 2019 to December 31, 2019; $7.87 per hour from 2020 through 2022; $8.87 per hour in 2023; and $9.87 per hour thereafter.

Beginning January 1, 2020, an employer may pay a training wage of at least 90 percent of the applicable general minimum wage to an employee enrolled in a qualified training program.

If in any year the increase in the CPI-W would result in a higher hourly rate than the fixed rate in the Minimum Wage Law, that higher rate will be the minimum wage. Likewise, if the federal minimum wage is higher than New Jersey's, then the state's minimum wage will be increased to match the federal minimum. 

Important Definitions

In order to understand the full impact of the new law, there are several definitions unique to the statute with which employers should familiarize themselves. Among them:

Small Employers

A "small employer" is one that employs fewer than six employees every working day during a majority of the calendar workweek in the current calendar year and not less than 48 calendar workweeks in the preceding calendar year. Special rules apply to newly established businesses.

Seasonal Employment

"Seasonal employment" includes (1) employment by a seasonal employer; (2) employment by a non-profit or government entity limited to the period of May 1 through September 30; and (3) employment by a government entity in a recreational program or service during the period May 1 through September 30. Farm laborers paid at either a piece rate or regularly hourly rate are specifically excluded from the definition. 

A "seasonal employer" is one that (1) exclusively provides its services in a continuous period of not more than 10 weeks from June through September; or (2) received at least two-thirds of its gross receipts in the previous calendar year in a continuous period of not more than 16 weeks; or (3) in the preceding year paid at least 75 percent of wages for work performed during a single calendar quarter. 

Qualified Training Program

An employer participating in a "qualified training program" is one that participates in an on-the-job or other training program complying with Department of Labor and Workforce Development regulations.  The training wage may be paid only for the first 120 hours after hire. The employer must have a reasonable expectation that the trainee will become a regular employee after training. The employer may not use training wage employees to displace current employees or replace or duplicate approved apprenticeship programs. Repeated violations of these rules will result in at least a three-year suspension of an employer's right to pay a training wage.

Tax Credit For Hiring An "Employee With An Impairment"

The Minimum Wage Law also offers a tax credit to an employer who employs an employee with an impairment. An "employee with an impairment" is one earning at least the applicable minimum wage whose work capacity is significantly impaired by age, physical, or mental deficiency, or injury, and whom the state has found eligible for personal assistant services or prescribed drugs necessary for the employee to perform the essential functions of their job. 

What Should You Do?

Employers in New Jersey must prepare themselves to comply with the new Minimum Wage Law. Be ready to adjust your payroll systems and practices by the first deadline—July 1—and amend any required postings and abstracts. Watch for the implementing regulations from the Department of Labor and Workforce Development, and monitor Department announcements, particularly in the period around September 30 each year, to see whether CPI-W increases will result in minimum wage increases above the new fixed rate. And keep your eyes on Washington, D.C. where sooner or later there will be an increase in the federal minimum wage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions