The minimum wage will start going up for most businesses on July 1, but NJBIA is still advocating for a number of changes to be made to the law before all employers have to absorb the full impact of its cost increases.
NJBIA warned of some very specific consequences to certain sectors of the economy and urged the Murphy administration and legislators to address them before making the bill law. They didn’t, but some lawmakers have introduced separate legislation to address them.
(Learn more about the $15 minimum wage law with NJBIA’s Fast Facts document, an exclusive benefit for member companies.)
“While the bill signed into law did not address many business owners’ concerns, many legislators understand that changes are still needed,” NJBIA Vice President Mike Wallace said. “NJBIA will be working with the Legislature to enact legislation to help mitigate the potential negative impact on New Jersey businesses.”
Here’s a look at some of the proposals.
Economic recession.
New Jersey, like the nation, has enjoyed an extended period of low unemployment thanks to slow but steady economic growth. If a recession hits, however, unemployment could be a serious problem, one exacerbated by the higher wages New Jersey employers will have to pay.
NJBIA had advocated for including an economic “off ramp” as the $15 minimum wage is phased in, allowing the state to halt the scheduled phase-in of higher wages if economic conditions warranted.
Legislators are trying to do that now with S-3607 /A-5226, which would provide two mechanisms by which the minimum wage increases would be suspended.
Very small businesses
The impact of the higher minimum wage will impact small businesses the most. S-3609 /A-5227 would provide gross income tax credits to businesses with 10 or fewer employees in three separate sets of circumstances to offset those impacts.
Hiring teenagers
S-3483 /A-5103 would establish a program to provide tax credits to employers who hire employees under 18, who are subject to the State minimum wage. The tax credits are intended to offset the cost of increases in wages and payroll taxes caused by the minimum wage law.
Understanding minimum wage’s impact on employment
S-3608 /A-5228 would create a task force to study impact of minimum wage increases on businesses.
The minimum wage law was signed Feb. 4. It sets New Jersey on a path to increase the minimum wage to $15 by 2024, but it’s not as straightforward as you may think. How much the minimum wage will rise and when depends, in part, on the size and type of business, as well as the age and position of the employee.
NJBIA also wants to hear from businesses about how the minimum wage increase is impacting them, including the compression on the wages of higher paid employees. We will continue to relate these impacts in real time to our policymakers.
Please email NJBIA at minimumwage@njbia.org to tell us the actions you’re taking now and into the phasing in of the law in July ($10 an hour) and again in January 2020 ($11 an hour).
