New Jersey recently passed legislation to gradually increase its current minimum wage of $8.85 per hour to $15.00 per hour by 2024. Initially, the minimum wage will increase to $10.00 per hour on July 1, 2019. Thereafter, the increase will be implemented as follows:
- January 1, 2020 - $11.00
- January 1, 2021 - $12.00
- January 1, 2022 - $13.00
- January 1, 2023 - $14.00
- January 1, 2024 - $15.00
However, as with like most laws, there are exceptions to the minimum wage increase schedule. Specifically, for seasonal workers and employees of small employers (five5 or fewer employees), the minimum wage increase will be implemented as follows:
- January 1, 2020 - $10.30
- January 1, 2021 - $11.10
- January 1, 2022 - $11.90
- January 1, 2023 - $12.70
- January 1, 2024 - $13.50
- January 1, 2025 - $14.30
- January 1, 2026 - $15.00
Agricultural workers are subject to their own minimum wage increase schedule. For those workers, the minimum wage increase will be implemeanted as follows:
- January 1, 2020 - $10.30
- January 1, 2022 - $10.90
- January 1, 2023 - $11.70
- January 1, 2024 - $12.50
By March 31, 2024, the Commissioner of Labor and Workforce Development and the Secretary of Agriculture will assess the impact of the minimum wage increases on farm employers and issue recommendations to determine whether the minimum wage increases should continue in the agricultural industry.
For tipped employees, the law provides that employers are entitled to a credit against the required minimum wage for the tips employees receive. The tip credit schedule increases as follows:
- December 31, 2018- July 1, 2019 - $6.72 credit (minimum cash payment $2.13)
- June 30, 2019 – January 1, 2020 - $7.37 credit (minimum cash payment $2.63)
- 2020 - $7.87 credit (minimum cash payment $3.13)
- 2021 - $7.87 credit (minimum cash payment $4.13)
- 2022 - $7.87 credit (minimum cash payment $5.13)
- 2023 - $8.87 credit (minimum cash payment $5.13)
- 2024 - $9.87 credit (minimum cash payment $5.13)
In addition to the above, the law provides that beginning January 1, 2020, an employer may pay a training wage of not less than 90% of the minimum wage to an employee enrolled in an established employer on the job or other training program. The employer may pay the training wage for the first 120 hours of work after hiring an employee in an occupation in which the employee has no previous similar or related experience. However, if an employer pays an employee a training wage, the employer must make a good faith effort to continue to employ the person after the training period expires. Further, an employer may not hire an employee at the training wage unless there is a reasonable expectation of regular employment paying at or above the effective minimum wage upon successful completion of the training wage period.
We hope this information serves as a useful roadmap to help employers prepare for the implementation of the new minimum wage law in New Jersey. If you have specific questions regarding New Jersey's new minimum wage law, visit our Labor & Employment Practice page to find an attorney in your area.
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