New Year Brings Marginal Increase to Minimum Wage in New Jersey

December 15, 2016 | By

On January 1, 2017, New Jersey’s minimum wage will increase from $8.38 to $8.44 per hour.  This six-cent increase is the first rise in minimum wage in New Jersey since January 2015.  This news comes shortly after Governor Chris Christie vetoed a Democratic-backed bill that would have increased the minimum wage to $15.00 per hour by 2021.  As discussed by HR Legalist in August, Governor Christie vetoed the bill following concerns within the business community over increased supply and labor costs, potential price increases or layoffs, and pressure on businesses to leave New Jersey.

The six-cent increase was the result of a statutory requirement that the minimum wage be modified based on the one-year period from August 2015 through August 2016 of the consumer price index (CPI) for urban wage earners and clerical workers (CPI-W, U.S. City Average), as reported by the U.S. Department of Labor, Bureau of Labor Statistics.

Some employees, however, are exempt from the statutory minimum wage rate, including:

  • Outside sales persons;
  • Sales persons of motor vehicles;
  • Part time employees primarily engaged in the care and tending of children in the home of the employer;
  • Minors under 18 years of age, except those working in: food service, the first processing of farm products, beauty culture occupations, laundry, cleaning and dyeing occupations, light manufacturing and apparel occupations, and hotel and motel occupations;
  • Employees at summer camps, conferences and retreats operated by any nonprofit or religious corporation or association during the months of June, July, August and September; and
  • Full-time students employed by the college or university at which they are enrolled should be paid at least 85 percent of the effective minimum wage rate.

New Jersey has a higher minimum wage than the $7.25 hourly rate required by federal law, but falls on the low-to-middle end of the wage spectrum compared to its neighboring states.  New York, for example, recently introduced a tiered schedule that will gradually increase minimum wage to $15.00 over the next four years.  Under this plan, effective December 31, 2016, New York City employers with 11 or more employees will be expected to raise the minimum wage from $9.00 to $11.00, while employers outside of the City will increase their minimum wage up to $10.00 an hour, depending on their location.  Pennsylvania, on the other hand, will maintain its longstanding minimum wage rate of $7.25.  The only exception to this standard was carved out by a recent Executive Order signed by Governor Wolf in March 2016, which allows for employees under the governor’s jurisdiction and some contract employees to earn $10.15 an hour beginning on January 1, 2017.

HR legalist will continue to monitor wage & hour changes that will impact employers in New Jersey and elsewhere.  Employers with questions about the implications of this minimum wage increase, or other wage and hour concerns, should seek the advice of experienced employment counsel.