On Monday, February 4, Governor Murphy signed A-15/S-15, a landmark piece of legislation gradually increasing New Jersey’s minimum wage to $15 an hour by 2024. Once fully phased in, this long-awaited wage hike will directly benefit an estimated one million or more workers.
Here's everything you need to know about New Jersey's new minimum wage:
When is the first increase? When will it reach $15 an hour?
The bill raises the current $8.85 minimum wage to $10 an hour in July, and then increases the rate by $1 in subsequent years until it reaches $15 in 2024.
Are there any exceptions?
Yes. The phase-in of the $15 minimum wage applies to the vast majority of workers in New Jersey, but not all. There are exceptions for seasonal employees, farm workers, tipped workers and employees of small businesses.
- Seasonal and small business employees will reach $15 an hour in 2026. Their pay will rise from $8.85 to $10.30 on Jan. 1, 2020; to $11.10 in 2021, $11.90 in 2022, $12.70 in 2023, $13.50 in 2024, $14.30 in 2025, and $15 in 2026. After 2026, the minimum wage will rise in accordance with changes in the consumer price index. They’ll get additional bumps to help catch them up to the standard minimum wage by 2028.
- Tipped workers, such as bartenders and waiters and waitresses, are paid through a combination of tips and wages that must at least equal the minimum wage. The tipped minimum wage is $2.13 an hour and it will rise to $5.13. If that hourly wage and tips don’t meet the minimum wage, the employer is supposed to make up the difference. Since the large gap between the tipped wage and minimum wage may leave workers vulnerable to wage theft, a separate bill cracking down on wage theft is working its way through the Legislature
- Farm workers are the only workers who aren’t guaranteed to hit $15 an hour under this new law. Their minimum wage will rise to $12.50 by 2024. That starts with an increase to $10.30 on Jan. 1, 2020, $10.90 on Jan. 1, 2022, $11.70 on Jan. 1, 2023, and $12.50 on Jan. 1, 2024. In 2024, the state labor commissioner and secretary of agricultural will decide, based on the impact of the wage hikes and wages in other states, whether or not to keep going to $15.
What else is in the law?
The law creates a training wage which allows employers to pay new employees a sub-minimum wage—but no less than 90 percent of the minimum wage—for their first 120 hours of work. In order to qualify, the employee has to have no experience in the occupation, and the employer has to make a "good faith effort" to employ that person after the training period. The bill also allows up to $10 million in tax credits annually for businesses that hire workers with disabilities.