|November 19, 2013|
Previously published on November 14, 2013
On November 5, New Jersey became the fifth state to add a minimum wage to its state constitution with 61 percent of voters supporting the ballot question. This was a hotly contested issue as business groups and unions spent significant money and time advocating for their respective positions. The constitutional amendment raises the state minimum wage from $7.25 to $8.25 an hour and sets automatic increases which are tied into the rate of inflation starting in January 2014. New Jersey is now the fifth state to add a minimum wage to its constitution — Florida, Colorado, Nevada, and Ohio already have such provisions — and the 11th state in the country that has automatic increases to the minimum wage.
The New Jersey Democratic controlled legislature voted earlier this year to increase the minimum wage to $8.50 an hour with automatic increases tied to inflation. Governor Chris Christie vetoed this bill, indicating that it would be detrimental to the economy, and instead proposed raising the minimum wage to $8.25 over a three-year period and increasing the earned income credit. The state Legislature was not willing to compromise, and instead placed the measure on the ballot for the New Jersey voters to decide.
Similarly, President Barack Obama has been pushing for a $9 per hour federal minimum wage for quite some time and it is anticipated that Democratic lawmakers will renew pressure to get such a bill passed. However, with the Affordable Care Act and its burdensome requirements on businesses, it may be difficult to obtain bipartisan support for a marked increase in the federal minimum wage, which is currently $7.25 per hour.
Only time will tell what impact, if any, an increase in the minimum wage will have on New Jersey businesses’ hiring practices and whether this will result in diminished opportunities and hours for employees working minimum wage jobs. Businesses in New Jersey need to make certain that starting in January they are compliant with the new minimum wage. The end of the year is also a good time to conduct wage hour audits to ensure compliance with the myriad of wage hour payment and collection laws.