New Jersey will be moving closer to its ultimate goal of a $15-an-hour minimum wage Jan.1, as the statewide minimum wage will increase by $1.13, to $14.13 per hour for most employees.
New Jersey raised the minimum wage from $8.85 to $10 an hour in July 2019 and then to $11 an hour Jan. 1, 2020. The state will continue to raise its minimum wage each year until it reaches the $15 mark in 2024.
Annual increases in the minimum wage are due to legislation signed by Gov. Phil Murphy in February 2019. Under the law, the minimum wage increases by $1 per hour — or more if warranted because of significant increases in the Consumer Price Index, as happened this year.
“The governor and Legislature had the forethought to account for the possibility of rising costs in their historic minimum wage law, which helps low-wage workers better provide for themselves and their families,” Labor Commissioner Robert Asaro-Angelo stated. “Every extra dollar in the paychecks of our lowest wage workers is helpful.”
The New Jersey Department of Labor & Workforce Development sets the minimum wage for the coming year using the rate specified in the law or a calculation based on the CPI, whichever is higher. Once the minimum wage reaches $15 per hour, the state constitution specifies that it continue to increase annually based on any increase in the CPI.
Under the law, seasonal and small employers were given until 2026 to pay their workers $15 per hour to lessen the impact on their businesses. The minimum hourly wage for these employees will increase to $12.93 an hour Jan. 1, up from $11.90.
Agricultural workers are guided by a separate minimum wage timetable and were given until 2027 to reach the $15-an-hour minimum wage. Employees who work on a farm for an hourly or piece-rate wage will see their minimum hourly wage increase to $12.01, up from $11.05. Additionally, long-term care facility direct care staff will see their minimum wage rise by $1.13, to $17.13.
Tipped workers’ cash wage will increase to $5.26 an hour, with employers able to claim an $8.87 tip credit, an increase in the maximum allowable tip credit of $1. If the minimum cash wage plus an employee’s tips do not equal at least the state minimum wage, then the employer must pay the employee the difference.