What Does New Jersey’s Minimum Wage Increase Mean for Employers?

On February 4, 2019, New Jersey Governor Phil Murphy successfully implemented one of his campaign promises by signing a bill that will increase the minimum wages of approximately one million hourly workers in New Jersey. At the time of the signing, the current minimum wage in New Jersey is $8.85 per hour. This new legislation will gradually and incrementally increase the minimum wage for many workers to $15.00 / hour by the years 2024-2026. New Jersey now joins a small minority of states that seeks to significantly increase their minimum wage to better the lifestyle of the “working poor.”

The first hourly wage increase will occur on July 1, 2019, and will cover most hourly workers who will then receive an increase to $10/hour. After that, there will be a $1 / hour increase every January 1 until the $15 benchmark is reached in 2024 for most hourly workers.

The above-described wage increase schedule does not apply to hourly seasonal workers, agricultural workers, or workers in small businesses. Seasonal workers are defined as those who work for businesses between May 1-September 30; small business workers are defined as those who work for businesses with fewer than six employees.

For small employer employees and seasonal hourly employees, the wage increase does not go into effect until January 1, 2020. On January 1, 2020, these workers will get an hourly increase to $10.30 / hour. Wage increases will then occur incrementally every January 1 until 2026 when the wage will reach its $15 / hour benchmark.

Agricultural / Farmworkers will also receive a wage increase on January 1, 2020, to $10.30 / hour and their benchmark will be $12.50 / hour by 2024. For these workers, there is a possibility of further wage increases, tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (“CPI-W”).

What does this mean for New Jersey employers? Starting on July 1, 2019, New Jersey employers must examine their hourly employees' wages and make sure they comply with the new mandates. After that, they should review their hourly employees' wages every December to ensure they meet the annual January increases.