The Senate Labor Committee today released NJBIA-backed legislation that would provide businesses that hire people under 18 years old with a tax credit to offset the cost of the state’s higher minimum wage.
S-718 (Addiego, D-8; Singleton, D-7) would provide an employer with a refundable tax credit against the corporation business tax or the gross income tax for the extra wages and payroll taxes paid to younger workers. It would limit total tax credits approved in a calendar year to $10 million.
“One of the unintended consequences of increasing the minimum wage so dramatically is an expected decrease in the employment of high school students,” said NJBIA President and CEO Michele N. Siekerka, Esq. “Our members have told us that as the minimum wage increases, they will be less likely to hire youth workers with limited skills or less experience.
“Without this legislation, many young workers will have challenges attaining that after-school or summer-vacation work experience that has helped set so many of us on our way in the workforce,” Siekerka said. “This bill would make it more feasible for an employer to hire someone under age 18.”
NJBIA opposed raising the state’s minimum wage to $15 per hour over five years, but since it became law, the association has been working to mitigate some of the negative impacts it will have on the state’s economy and business operations, especially at small businesses.
NJBIA also is advocating for other legislation to help mitigate the negative effects of the minimum wage increase. These bills include an “economic off ramp” to suspend minimum wage increases in a severe recession or after a natural disaster, tax credits for businesses with 10 or fewer employees, and a requirement to study the impact of the minimum wage increase on the economy.