New Jersey Approves New Minimum Wage

03/07/19

Author: ADP Admin/Monday, March 4, 2019/Categories: State Compliance Update, New Jersey

New Jersey approves New Minimum Wage Overview: New Jersey has enacted legislation (Assembly Bill 15) that will raise the state’s minimum wage in several stages.

Effective Date: next increase July 1, 2019

Details:
General Minimum Wage: With limited exceptions, the minimum wage will increase as follows:

$10 per hour on July 1, 2019
$11 per hour on January 1, 2020
$12 per hour on January 1, 2021
$13 per hour on January 1, 2022
$14 per hour on January 1, 2023
$15 per hour on January 1, 2024

Beginning January 1, 2025, the minimum wage rate will be adjusted for inflation.

Training Wage: The law also permits employers to pay a training wage of 90 percent of the general minimum wage to an employee who is enrolled in on-the-job or other training that meets standards set by the state. The training wage may be paid for the first 120 hours of work in an occupation in which the employee has no previous similar or related experience.

Tipped Employees: Assembly Bill 15 also increases the amount of direct cash wages tipped employees must receive:

From July 1, 2019 to December 31, 2019, the minimum cash wage will be $2.63
From January 1, 2020, to December 31, 2020, the minimum cash wage is $3.13
From January 1, 2021, to December 31, 2021, the minimum cash wage is $4.13
From January 1, 2022 December 31, 2024, the minimum cash wage is $5.13

Thereafter, the minimum cash wage will increase with the inflation-adjusted minimum wage. If the employee’s direct cash wages and tips don’t equal or exceed the applicable minimum wage, the employer must make up the difference.

Small Employers and Seasonal Employees: The schedule for minimum wage increases is different for employees of small employers and employees who are engaged in seasonal work. Under the law, a small employer is defined as an employer with less than six employees for most calendar workweeks in the current calendar year and fewer than six employees for every working day during at least 48 calendar workweeks in the preceding calendar year. The law also defines seasonal employment. See the full text of the law for details.

With the exception of tipped employees, the minimum wage rate for employees of small employers and employees who are engaged in seasonal employment will be as follows:

$10.30 per hour on January 1, 2020
$11.10 per hour on January 1, 2021
$11.90 per hour on January 1, 2022
$12.70 per hour on January 1, 2023
$13.50 per hour on January 1, 2024
$14.30 per hour on January 1, 2025
$15.00 per hour on January 1, 2026

The minimum wage will be adjusted in 2027 and 2028. By 2028, the minimum wage for these employees will equal the general minimum wage.

Note: There is also different minimum wage rate schedule for employees who perform labor on a farm.

Action Required: As always, please reach out to your dedicated service professional with questions.

This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.

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