Employers in the Garden State need to be aware that on July 24, 2009 the New Jersey minimum wage will increase by 10 cents, from $7.15 to $7.25 per hour.
Many employers question the timing of this change in the midst of the worst recession in 60 years. However, under state statute, the New Jersey minimum wage cannot be lower than the federal minimum wage.
The New Jersey minimum wage law covers smaller employers in the state. Under state law, the New Jersey minimum wage matches the federal minimum wage, which increases from $6.55 to $7.25 on July 24, 2009, a raise of 70 cents per hour.
On that same date, the New Jersey state minimum wage will increase to $7.25 per hour, too. Employers across the state must update their state and federal minimum wage posters before that date.
At present, there is no federal minimum wage increase scheduled for 2010. The Division of Wage and Hour Compliance of the New Jersey Department of Labor and Workforce Development enforces the state minimum wage laws.
New Jersey employers not covered by the state minimum wage (more…)
An organization the Garden State called the New Jersey Policy Perspective is pushing for changes to the New Jersey minimum wage law. This is after the New Jersey minimum wage increased from $5.15 per hour to $6.15 per hour in 2005, and then up to $7.15 per hour in 2006. The reason for the push, say the organizers, is because the state of New Jersey has the fourth highest cost of living in all of the United States. But in terms of the state minimum wage, New Jersey has the ninth highest minimum wage in there, and it is tied with a bunch of other states to boot. By the year 2010 comes, according to the New Jersey Policy Perspective’s figures, New Jersey, if it’s minimum wage stays at the level it’s currently at, will have then the 17th highest minimum wage in the country.
The New Jersey Policy Perspective people are not calling for a new law per se, or a big increase in the New Jersey minimum wage. Instead, the New Jersey Policy Perspective is in a push to get the New Jersey minimum wage tied to the inflation rate. There are already 10 other states in the Union that attach their minimum wages to the inflation gauge (can you name them?). And the New Jersey law has a built in provision that could give the state the chance to do just that without having to pass a new law, says the New Jersey Policy Perspective.
This provision in the New Jersey minimum wage law is that the new law has created a so called state Minimum Wage Advisory Commission. It is the job of this New Jersey Minimum Wage Advisory Commission to research and consider the New Jersey minimum wage every year, to make sure it is still adequately meeting the needs of the lowest paid workers in the state and not infringing upon employers too much.
The New Jersey Minimum Wage Advisory Board then has to make a report based on its analysis. It is with this report, says the New Jersey Policy Perspective, that the New Jersey Minimum Wage Advisory Board could recommend every year to have the minimum wage raised by the inflation rate.
Of course, in a couple of years, the state of New Jersey’s employers could be seeing a raise in the New Jersey minimum wage anyway. If all stays as is at the moment—with New Jersey’s minimum wage staying at $7.15 per hour—and we assume that the federal minimum wage increase is now a done deal—then by the year 2009, the federal minimum wage will become $7.25 per hour, and most New Jersey employers will be required to pay that higher wage rate to their lowest paid workers.
But in the very least, the New Jersey Policy Perspective people are suggesting that the New Jersey minimum wage could and should be raised to half of the average wage in the state. That would raise the New Jersey minimum wage to about $8.50 per hour, a more than one dollar raise in the rate. At the moment, according to the New Jersey Policy Perspective people, the New Jersey minimum wage represents about 40 percent of the average wage in the state.
What are the chances of the New Jersey Policy Perspective carrying out their plans for the New Jersey minimum wage? Because this is not a legislative issue at the moment, and the New Jersey Policy Perspective is not calling for a legislative change really, then the complete onus falls on the New Jersey Minimum Wage Advisory Commission. Meanwhile, the New Jersey Policy Perspective can continue to follow their First Amendment rights and voice their opinion.
As I was saying, New Jersey’s minimum wage is already at a point higher than the federal minimum wage—at $7.15 per hour versus $5.15 per hour. This new minimum wage in Jersey went into effect on October 1, 2006. The new minimum wage was passed as an addendum to the already existent New Jersey State Wage and Hour Law.
This is the very same law, my loyal readers, that gives New Jersey employers their instructions on how to pay overtime to their employees, and how to hire and work with minors under the age of 18. The law also instructs the New Jersey employers out there how to pay or withhold wages, and when and how often they must pay their employers.
If you are an employer in the farm business, you might want to refresh your knowledge of the New Jersey minimum wage law there, because there are different rules for farm labor employees than for regular employees in the state. That is a pretty big deal, because they don’t call New Jersey the Garden State for nothing—there is a lot of farming going on in the middle of the state.
The New Jersey minimum wage law also goes into special rules for contractors and their employees, who must also have a registration to be engaged in any public works building projects, whether they be contractors or subcontractors. The registration is an annual thing, and requires contractors to pay a $300 fee for the year, or $500 for a fee for two years.
Employers in the apparel industry also have to file a special registration with the New Jersey Department of Labor, and that is if you are in the manufacturing or even contracting facets of the apparel industry. The New Jersey minimum wage is the same for these employers though.
How could three out of four New Jersey employers say that they don’t think that the federal minimum wage will affect them? And these were small and midsize employers, too, those we would expect to feel the federal minimum wage increase a little more than large employers. Well, one of the main reasons that New Jersey employers responded this way to the survey is because many, if not all, already pay a higher minimum wage than the federal minimum wage would become in the event of an increase.
The New Jersey minimum wage, after all, is already $7.15 per hour. The way the new federal minimum wage increase will go down, if you remember, is that the first increase, hich would happen 60 days after the law is signed by the president of the United States, would be to $5.85 per hour, which is below the New Jersey minimum wage level. The next increase in the federal minimum wage, occurring a year later in 2008, would raise the federal minimum wage to $6.50 per hour, still below the New Jersey minimum wage. Not until 2009, when the federal minimum wage would go up to $7.25 per hour according to the proposed law in the House and the Senate in Washington DC, would the New Jersey minimum wage get eclipsed by the federal minimum wage, and that is assuming that the New Jersey minimum wage does not go up between now and 2009
But get this—that higher New Jersey minimum wage might not be the only reason that New Jersey employers are for the most part not overly concerned about the federal minimum wage increase. The PNC survey also looked at employers across the country not just in New Jersey, and about 77 percent of employers across the country said the same thing: they do not see the federal minimum wage increase affecting them all that much.
Before we get into the New Jersey state minimum wage, I thought I would look at how the state’s employers are gearing up for the federal minimum wage increase. Because I don’t know if you’ve heard—you would have if you’ve been reading this blog yesterday—but the federal minimum wage took one big step toward becoming a part of the reality of most every employer in the country. That is because House and Senate leaders agreed to a sum for the tax cuts for small employers that will accompany the federal minimum wage increase. That tax break sum—about $4.8 billion over the course of the next 10 years or so.
So, employers, you should be looking now how this federal minimum wage increase will affect your operations, in terms if the effect it will have on your bottom line, how it will change your pay roll procedures, and how it will alter other aspects of your human resource operations. Not to mention, you will also need to know where to get your new updated federal minimum wage poster from. Hint, hint: Check out our sister Web site here.
But anyway, back to my point—an example of how your peers, other employers in the state of New Jersey, are gearing up for this federal minimum wage increase, if at all. A new survey in the Garden State was just carried out by the big bank, PNC. The bank surveys small and middle sized customers and employers to see how they are faring economically.
In the survey this time around, PNC decided to ask its respondents about how they feel about the federal minimum wage increase. Lucky us. Out of all of the respondents in the survey, about 75 percent, or three out of four of them, said that the proposed increase in the federal minimum wage would not affect them very much.