New Jersey’s New $15.00 Per Hour Minimum Wage Law
By Kara Miller and Inés Cruz
The push for a $15.00 minimum wage rate in New Jersey will now become a reality thanks to new legislation that was recently passed. Increases to the minimum wage rate will be gradually phased in over the next few years. For most employees, the minimum wage will be as follows:
- $8.85 beginning January 1, 2019;
- $10.00 beginning July 1, 2019;
- $11.00 beginning January 1, 2020;
- $12.00 beginning January 1, 2021;
- $13.00 beginning January 1, 2022;
- $14.00 beginning January 1, 2023; and
- $15.00 beginning January 1, 2024
Tipped employees must receive the same hourly wage rates as above. However, employers may take a tip-credit and pay less than the minimum wage rate so long as tips make up the difference. The new law permits employers to take the following tip credits against the general minimum wage: $6.72 per hour from January 1, 2019 to June 30, 2019; $7.37 per hour from July 1, 2019 to December 31, 2019; $7.87 per hour from 2020 through 2022; $8.87 per hour in 2023; and $9.87 per hour thereafter. Currently, this means that a tipped employee must receive an hourly wage of at least $2.13. This will increase to $2.63 per hour beginning July 1, 2019.
There is a notable exception for small employers who employ 5 or fewer employees each work day. For small employers, the minimum hourly wage rate will remain $8.85 through 2019. It will then increase to $10.30 on January 1, 2020. The minimum wage rate for small employers will increase by 80 cents each year thereafter through 2025 and by 70 cents in 2026.
There are also exceptions for agricultural employers, seasonal employers, and those in a qualified training program.