Get Ready For A $15 Minimum Wage In NJ: Here's What It Means

Get ready for a $15 minimum wage. It's approval is now a virtual certainty.

Gov. Phil Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin announced an agreement on legislation to raise New Jersey’s minimum wage to $15 an hour on Friday.

The agreement is the result of months of "deliberative and thorough negotiations," raising wages for more than 1 million workers and promoting broad-based economic growth, lawmakers said. The legislation, however, will have "carve-outs" that Murphy had opposed.

“Today, we are taking a historic step to provide more than 1 million New Jersey workers a stronger foothold in the middle class,” said Murphy. “No one working a full-time job should ever live in poverty.

Its not clear if the legislation will apply to restaurant workers who rely on tips to raise their incomes above minimum wage.

Under the legislation, the base minimum wage for New Jersey workers would increase to $10 an hour on July 1, 2019. By Jan. 1, 2020, the statewide minimum wage would increase to $11 an hour, and then would increase by $1 an hour every January 1st until it reaches $15 an hour on January 1, 2024.

For seasonal workers and employees at small businesses of five workers or less, the base minimum wage would reach $15 an hour by Jan. 1, 2026. By Jan. 1, 2028, workers in these groups will receive the minimum wage inclusive of inflation adjustments that take place from 2024 to 2028, equalizing the minimum wage with the main cohort of New Jersey workers.

"Putting the minimum wage on a clear and responsible path to $15 an hour is good for workers, good for our businesses, and good for our economy," Murphy said. "A higher minimum wage strengthens all of New Jersey. I thank Senate President Sweeney and Speaker Coughlin for their commitment to this issue, and look forward to signing this legislation into law.”

For agricultural workers, the base minimum wage would increase to $12.5 an hour by January 1, 2024. No later than March 31, 2024, the New Jersey Labor Commissioner and Secretary of Agriculture will jointly decide whether to recommend that the minimum wage for agricultural workers increase to $15 an hour by Jan. 1, 2027, as specified in the bill.

If they cannot come to an agreement, a third member, appointed by the governor with the advice and consent of the Senate, will break the tie. If there is a recommendation to disapprove of the scheduled increases or suggest an alternative pathway, the Legislature will have the ability to impose that recommendation by passage of a resolution.

“This is a progressive plan to elevate New Jersey’s minimum wage to $15 so that workers have a fair wage that allows them to support themselves and their families,” said Sweeney. “This plan will put New Jersey in the forefront of the national movement to build a high-wage economy.

Not everyone was happy with the news.

Michele N. Siekerka, New Jersey Business & Industry Association president and CEO, issued the following statement regarding the announcement of an agreement:

"Historically, NJBIA has been opposed to a minimum wage that artificially inflates the value of an entry-level position. We have, instead, advocated for workforce development and believe that when skills are lifted, wages are naturally increased.

"Today's announcement is another hit to small businesses who are absorbing cumulative costs in the form of new mandates, more subsidies for energy delivery and increased taxes as a means to balance the state budget. Most small business owners pay what they can afford for their workers. Now that it's a mandate, it is inevitable that some of those with the smallest of profit margins will struggle, stagnate or simply fail.

Democratic lawmakers, however, disagreed, pointing out that the legislation includes carve-outs.

“It will increase the wages for farm workers to $12.50 within five years, making it the highest wage for farm worker in the Northeast," Sweeney said. "The plan includes tax credits for employers who hire people with disabilities, which will support the further integration into the workplace of those with disabilities, giving them the opportunity for meaningful employment and providing employers with highly motivated workers. It also includes a ‘parity’ provision that will provide additional increases for small business and seasonal workers.

“As the increases take effect, we must be sensitive to the impact it will have on working people who are below the ‘safety net’ and could be at risk of losing benefits as their wages increase. We don’t want to see them harmed by lost benefits as they gain in wages,” Sweeney said.

“Since the day I was sworn in as Assembly Speaker, I have pledged to do all I can to make New Jersey more affordable. By increasing the minimum wage to $15 an hour by 2024 for the majority of workers we are achieving the goal of lifting people up to improve their quality of life,” said Coughlin. “We also took into consideration the concerns of our State’s valued small business community. I thank Governor Murphy and Senate President Sweeney for working with me so closely and tirelessly to ensure fairness for future generations of workers.”

Governor Murphy photo