As 2024 rings in, it also marks the crossing of a notable threshold here in the Garden State when the minimum wage increases Jan. 1 to $15.13 per hour.

That figure, affecting some 350,000 of New Jersey’s nearly 1.9 million hourly workers, surpasses the $15 per hour goal set into law in 2019 and makes the state one of just a handful to reach that mark.

“Raising the minimum wage has been a top priority of mine since day one,” said Gov. Phil Murphy. “There is no doubt that inflation has had an impact on every New Jerseyan. Now that we are close to surpassing the $15 per hour milestone, it’s important that we continue to ensure that everyone working in New Jersey has access to a livable wage.”

Industry specifics:

• Seasonal employers and businesses with six or fewer employees have until 2026 to pay workers at least $15 per hour – these employees’ minimum wage increases to $13.73 per hour on Jan. 1.
• Agricultural workers are guided by a separate timetable and were given until 2027 to reach the mark – they will see their hourly wages increase by 80 cents, to $12.81 per hour.
• Long-term care facility direct care staff will see their minimum wage increase by $1 to $18.13 per hour.
• Tipped workers’ cash wage remains at $5.26 per hour with employers able to claim a $9.87 tip credit – a $1 increase. If the minimum cash wage plus an employee’s tip do not equal at least the state’s minimum wage, the employer must pay the employee the difference.

The minimum wage is set by the New Jersey Department of Labor and Workforce Development (NJDOL) using either the rate specified in the law, or a calculation based on the Consumer Price Index (CPI) – whichever is higher. New Jersey’s constitution specifies that the minimum wage will continue to be adjusted annually based on CPI.

“Raising and aggressively enforcing the minimum wage signals to employers and workers alike that New Jersey values its workforce,” said Labor Commissioner Robert Asaro-Angelo. “While our Department’s Workforce efforts try to ensure workers receiving minimum wage are only doing so for a small part of their career, this is a proud moment for New Jersey as we become one of the few states with a minimum wage above $15 an hour that will continue to be adjusted each year for inflation.”

The NJDOL also announced changes in the maximum benefit rates and taxable wages for its Unemployment Insurance (UI), Temporary Disability Insurance (TDI), Family Leave Insurance (FLI) and Workers’ Compensation programs, which begin Jan. 1, 2024.

Business as usual

“The New Jersey business community expected the minimum wage to rise to around $15/hour on Jan. 1 so there’s no surprise with this increase. Employers had time to prepare so it’s business as usual in regard to that,” Tom Bracken, president and CEO, New Jersey Chamber of Commerce, told NJBIZ in a statement. “However, there is talk during the lame duck of expanding paid family leave which would be an additional financial burden on small businesses. This creates much unpredictability for them – and adds further financial constraints on their ability to operate.”

“We have always said businesses will pay what they can afford. According to our 2024 Business Outlook Survey, 34% of businesses increased pay for employees by 5% or more. Three years ago, during the height of the pandemic, that number was only 12%,” Michele Siekerka, president and CEO, New Jersey Business & Industry Association (NJBIA), told NJBIZ in a statement. “And despite uncertain economic outlooks nationally and in New Jersey, businesses expect that upward trend to continue in 2024, with 21% saying they’ll increase wages more than 5%.”

“However, we also saw less in the way of profits in 2023,” Siekerka continued. “Only 32% of respondents reported profits for the year. At the same time, 44% reported a loss. And in recent years, we have still seen a ton of small businesses shudder because, as we emphasize more than ever, every dollar counts. That’s not a tag line. That’s the truth.”

Regarding talk of potentially looking into raising the minimum wage further – as the governor has hinted at – Siekerka believes that the market is always the best natural determinant, as opposed to another mandate.

“The truth of the matter is that more entry-level positions exceeded the $1 increase per year over the past five years, especially given the aftermath of COVID and workplace demands,” Siekerka explained. “It also should be said that the state constitution specifies that minimum wage be determined by the CPI. We shouldn’t be dismissing that. It might be better to take a pause to analyze inflation and the free market rather than just setting a number.”

She stressed that we do not know which way the economy is going.

“And there are still businesses that are still very much vulnerable,” said Siekerka. “Most of our employers have a keen awareness to the economy and their own bottom lines. They know what they can afford and what they can’t. Let the free market do its work.”

Most of our employers have a keen awareness to the economy and their own bottom lines. They know what they can afford and what they can’t. Let the free market do its work.
— Michele Siekerka, president and CEO, NJBIA

In a press release, Business for a Fair Minimum Wage applauded the 22 states (including New Jersey) that are ringing in the new year with a minimum wage increase. According to the national network of business organizations, owners and executives that believe an increased minimum wage makes good business sense, another three states and the District of Columbia are scheduled for increaseses later in 2024.

“Minimum wage increases are a great way to start the new year,” said Holly Sklar, CEO, Business for a Fair Minimum Wage. “They help workers put food on the table and keep a roof overhead and they boost the consumer spending that businesses depend on. Fairer wages help businesses hire and retain employees and deliver the reliable customer service that leads to repeat customers instead of lost customers. While the federal minimum wage falls further and further behind the cost of living at just $7.25 an hour, state increases are vital for workers, businesses, and communities.”