With the federal minimum wage stalled at $7.25 since 2009, HR Legalist has been tracking several developments to wage and hour law on both the federal level (via the pending overtime rule change recently reported by HR Legalist on May 18th) and the state level as well.  As detailed in my last post on this topic, earlier this year, New Jersey democrats announced a joint proposal that would increase the state minimum wage to $10.10 per hour, and then continue to increase the rate annually until it reaches $15 per hour.

A version of this new minimum wage bill, A-15 (Prieto/Wisniewski), just passed in the New Jersey Assembly on May 26th.  Similar to the initial proposal, the bill would increase the NJ minimum wage to $10.10 on January 1, 2017, and would include annual increases of at least $1.25 each year until 2021.  By that time, the minimum rate would meet or exceed $15 per hour – a 79% increase over the current state minimum of $8.38.  After that, the rate would continue to be adjusted each year based on the consumer price index.

The bill has attracted widespread opposition from businesses and business groups. For example, the Chamber of Commerce of Southern New Jersey recently released a memorandum in opposition, raising concerns about the bill’s impact on joblessness, automation, and competitiveness with other states.

What’s next?

An identical Senate bill, S-15 (Sweeney/Vitale), was referred to the Senate Budget & Appropriations Committee on May 16th.  It has not yet been scheduled for a full Senate vote.  Given the democratic majority in the Senate, that bill may pass as well.  However, Governor Christie is expected to veto the measure.  To override a veto, the legislature would need to muster a two-thirds majority of both houses (54 votes in the Assembly, 27 votes in the Senate).  Judging by the 42-31-1 margin of passage of the Assembly bill, the veto would likely stand.  However, New Jersey democrats have already indicated that in the event of a veto, they will convert the proposal to a constitutional amendment to be considered by the voters in the November 2017 general election.

Given the anticipated cost of this increase for New Jersey employers, HR legalist will continue to track this proposal as it makes its way through the legislature—and, potentially, to the ballot box.


 

Ivo Becica- 3394Ivo Becica focuses his practice on advising employers on how to reduce litigation risk and resolve employee issues, and on defending employers in litigation if necessary. He can be reached at 215-667-6335 or ivo.becica@obermayer.com