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Minimum Wage Increase Passes First Legislative Test
By Jeffrey D. Winitsky on January 24, 2019
Minimum Wage Increase Passes First Legislative Test

On January 17, 2019, Governor Phil Murphy and Legislative Leaders announced the collective decision to raise the minimum wage rate in New Jersey from $8.85 per hour to $15 per hour for most businesses over a five (5) year period.  On January 24, 2019, the New Jersey Assembly's Labor Committee approved legislation (Assembly Bill A-15) that would implement the minimum wage increase.  If approved by other Legislative Committees, passed by both the full Assembly and Senate, and signed into law by the Governor in its present form, key provisions of Bill A-15 include the following:

General Employees

  • On July 1, 2019 the minimum wage rate will increase to $10 per hour;
  • On January 1, 2020 the minimum wage rate will increase to $11 per hour;
  • For each year thereafter, the minimum wage will increase by $1 per hour every January 1 until it reaches $15 per hour on January 1, 2024;
  • For any year, in accordance with the State Constitution, in the event that the consumer price index adjustments for all urban wage earners and clerical workers (referred to as "CPI-W") are higher than the staged increase, the minimum wage will follow the CPI-W increase, taking effect on the first of every year; and
  • Starting in 2020, employers would be able to pay "training wages" equal to at least 90 percent of the minimum wage for the first 120 hours of work by people enrolled in a training program. 

Key Exceptions for "Seasonal Workers" and Employees of "Small Businesses"

  • A "seasonal worker" is generally defined in the bill as an employee whose employment occurs only during the period between May 1 to September 30, while a "small employer" is any business with fewer than six (6) workers.
  • The implementation of the minimum wage increase for each is more drawn out as follows:
    • $10.30 on Jan. 1, 2020;
    • $0.80 increase every subsequent Jan. 1 until reaching $14.30 in 2025; and
    • $0.70 increase, to $15, on Jan. 1, 2026.
  • After 2026, wage increases will correspond to the CPI-W, plus separately calculated marginal increases so that the minimum wage for "seasonal workers" and employees of "small businesses" is the same as all other employees by 2028.

Exception for Agricultural Workers

  • The $15 per hour minimum wage rate will not apply to agricultural employees, but instead such minimum wage will peak at $12.50 per hour by January 1, 2024, with any further increases subject to review by the New Jersey Department of Labor and Workforce Development and approval by the State Legislature.

We will provide additional updates as the details of the Bill become finalized and the same is considered for final passage and approval by the Governor.

The content of this post is for informational purposes only and should not be construed as legal advice or legal opinion. You should consult a lawyer concerning your specific situation and any specific legal question you may have.

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