A $15 Minimum Wage is Coming to New Jersey. Here’s What Employers Must Know

Feb 11, 2019
| David Pearson
$15 minimum wage in New Jersey

On January 1st, New Jersey’s minimum wage increased to $8.85, up 25 cents from last year.

And while this increase is higher than the federal minimum wage (which has been at $7.25 for almost a decade), it’s not nearly as worker-friendly as New York. The Empire State currently has a $15 minimum wage for businesses with 11 or more employees. Companies with 10 or fewer workers will reach $15 at the end of this year.

However, one of Governor Phil Murphy’s main campaign promises was to get New Jersey to a $15 minimum. And on February 4th, the Governor officially signed a bill that will do just that.

New Jersey Will Have a $15 Minimum Wage by 2024

On Thursday, January 31st, New Jersey lawmakers officially passed a bill that would increase the minimum wage of New Jersey by 2024 through a phase-in process. The Governor would go on to sign the bill just a few days later, making New Jersey the 4th state to have a $15 minimum wage law.

What does this new law mean for employers in New Jersey?

The first thing to know is that the current minimum will increase for the 2nd time in 2019. As the first part of the phase-in, minimum wage for most workers will rise to $10 on July 1st, 2019.

Here is the full schedule for when wage increases will take place:
  • $10 – July 1, 2019
  • $11 – January 1, 2020
  • $12 – January 1, 2021
  • $13 – January 1, 2022
  • $14 – January 1, 2023
  • $15 – January 1, 2024

It’s extremely important for New Jersey employers to remember these dates, especially July 1st of this year, to ensure payrolls are updated accordingly to avoid compliance issues.

Are All Employees and Employers Subject to the Same Timeline?

Another aspect of the law that is important for employers to be aware of is that not all New Jersey businesses will be required to follow the timeline listed above.

Two groups will follow the same modified timeline: seasonal workers and employees of small businesses with 5 or less workers. These groups wouldn’t see their first wage boost until January 1, 2020, when it would increase to $10.30 per hour. The $15 goal wouldn’t be reached until 2026, giving these employers more time to plan and prepare.

Agricultural workers are another group that will be under a modified timeline, with their minimum wage reaching $12.50 in 2024. Once this number is realized, it will be up to state officials in the executive branch to decide whether to continue to a $15 minimum wage by 2027.

The state tipped wage also increases with this law, going from $2.13 to $5.13 per hour.

A $15 Minimum Wage in New Jersey is Coming, But Not Everyone is Happy

While the majority of workers were happy with the announcement, there’s also opposition to the new law.

Republican lawmakers and some businesses were not in favor of increasing the state’s minimum wage to $15. They worry that such a rise could lead to increased costs for consumers, staff cuts, reduced benefits for employees, or even business closures.

Proponents of the wage hike, however, have long said that doing so would help workers keep pace with the cost of living and help boost the state economy.

New Jersey Employers Must Now Be Ready for a $15 Minimum Wage

With this bill now signed into law, employers in New Jersey must take the necessary steps to ensure compliance as minimum wage hikes take place – starting on July 1st.

Failing to do so could lead to penalties such as fines and lawsuits should payrolls not be updated accordingly. Small businesses in particular could be at risk, as minimum wage laws tend to be one of the top HR compliance challenges.

Small business owners who need assistance should work with their brokers and/or HR experts who can help ensure the business is fully prepared for each phase-in component of the new $15 minimum wage law.

How can outsourcing help small and medium-sized businesses overcome 10 common HR symptoms? Our eBook explains these HR challenges, and how partnering with a PEO can help overcome them!

10 HR Symptoms That PEO Can Cure