On Election Day, voters in New Jersey overwhelmingly approved an amendment to the state constitution raising the minimum wage to $8.25. The $1 increase, which takes effect January 1, 2014, will be followed by an annual cost-of-living increase. New Jersey’s minimum wage is among the highest in the country, although several states either have or are phasing in minimum wage rates of $9 per hour or more, and at least one city recently enacted a significantly higher minimum wage. Unlike many employment laws, the minimum wage applies to all businesses regardless of size. Small businesses in New Jersey with minimum-wage employees should prepare for the upcoming wage increase.
Federal law sets a baseline minimum wage, which has been $7.25 per hour since July 24, 2009. States are free to enact their own minimum wage limits. The state of Washington has the highest state-level minimum wage, at $9.19 per hour. New York and Connecticut are phasing in minimum wage increases that will eventually reach $9. The city of SeaTac, Washington approved a ballot initiative on November 5, 2013 that will raise the minimum wage for some workers to $15 per hour.
According to the U.S. Department of Labor, as of January 1, 2013 nineteen states and the District of Columbia set the minimum wage higher than the federal level. New Jersey’s minimum wage, established by state law, was the same as the federal minimum wage until now. Under state minimum wage law in New Jersey, employers who pay less than the minimum amount may be subject to both administrative and criminal penalties, including fines and jail time.
New Jersey is now one of only five states that have included the minimum wage in their state constitutions. The measure approved by voters adds Paragraph 23 to Article I of the New Jersey State Constitution. Beginning on September 30, 2014, and continuing on the same date every year, the minimum wage will go up by the amount of increase, if any, in the consumer price index for all urban wage earners and clerical workers (CPI-W) during the previous one-year period, as determined by the federal government. Any increase in the minimum wage would take effect the following January 1.
Criticisms of the minimum wage increase have come from New Jersey business owners and business organizations. Around 50,000 people in the state receive minimum wage, according to South Jersey news station NBC40. Critics claim that the increase will result in lower profits and loss of jobs, while supporters say that it will bring the state’s minimum wage more in line with the cost of living in the New Jersey of 2013. Either way, New Jersey’s small business owners should begin preparing now for any applicable wage increases coming with the new year.
Small business attorney Samuel C. Berger offers fixed-fee legal-service packages to New York and New Jersey entrepreneurs and businesses. We handle a variety of legal matters for our clients, including business formation, mergers and acquisitions, contracts, and other transactions. Our goals are to help our clients understand their rights and obligations as business owners, maintain their business operations, and realize their goals. Contact us today online or at (212) 380-8117 to schedule a confidential consultation with a member of our legal team.
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Legislation Increasing Minimum Wage Makes Its Way Through New Jersey Legislature, New York & New Jersey Business Lawyer Blog, March 9, 2012
Photo credit: By DOL (http://www.dol.gov/whd/minwage/america.htm) [Public domain], via Wikimedia Commons.