Inflation To Drive NJ's Minimum Wage Increase Higher Than $1 Next Year

NEW JERSEY — Inflation will push New Jersey's minimum wage slightly higher than originally scheduled. Instead of rising to $14 per hour in 2023, the minimum wage will reach $14.13.

New Jersey passed a law in 2019 that gradually raised the minimum wage from $8.60 to $15 per hour for most employees by 2024. The current wage, as of Jan. 1, is $13 per hour.

During the transition period to the $15 minimum wage, New Jersey typically raises the figure by $1 each year. But under the state law, the minimum can increase more in the event of significant increases in the Consumer Price Index — a figure used to measure inflation.

"The Governor and Legislature had the forethought to account for the possibility of rising costs in their historic minimum wage law, which helps low-wage workers better provide for themselves and their families," state Labor Commissioner Robert Asaro-Angelo said in a statement. "Every extra dollar in the paychecks of our lowest wage workers is helpful."

But for each worker, the difference in pay from the originally planned $14 per hour may not make much difference. The extra 13 cents per hour would give a full-time, minimum-wage employee an extra $270.40 per year — before taxes and other paycheck deductions.

New Jersey will still have one of the highest minimum wages in the nation, especially with the federal minimum wage at $7.25 since 2009. The 13-year gap marks the longest the federal government has gone without upping the minimum wage since it was first introduced in 1938.

Under the state's law, seasonal and small employers have until 2026 to pay their workers $15 per hour. The minimum wage for employees in those businesses will increase Jan. 1 from $11.90 to $12.93 per hour.

Agricultural workers have a different timetable, with the industry given until 2027 to reach $15. Employees who work on a farm for an hourly or piece-rate wage will see a minimum-wage increase from $11.05 to $12.01 in 2023. Direct-care staff in longterm care facilities will see a $1.13 minimum-wage raise to $17.13.

Additionally, tipped workers' cash wage will rise to $5.26 an hour, with employers able to claim an $8.87 tip credit — an increase in the maximum-allowable tip credit of $1. If the minimum cash wage plus an employee’s tips do not equal at least the state minimum wage, then the employer must pay the employee the difference.