Have you been seeing a few extra dollars in your paycheck? On January 1, 2015, the minimum wage in New Jersey rose from $8.25 an hour to $8.38 per hour. The rise is the result of a voter-approved constitutional amendment passed in November 2013, which initially raised New Jersey’s minimum wage to $8.25 in 2014 and provided for subsequent automatic yearly cost-of-living increases.
But why $0.13? Well, the increase each year is calculated to keep the same pace as the Consumer Price Index (CPI). The CPI is measured by the federal Department of Labor and averages out the price of goods to estimate the “real” value of money (for example, how many loaves of bread a dollar buys). New Jersey will calculate the yearly change and adjust the minimum wage each September to track with the percentage increase of the CPI. If the CPI does not increase (meaning there was no measured inflation over the previous 12 months), the minimum wage will remain the same. Any scheduled increase will take effect the following January 1. Once each new minimum wage takes effect, all subsequent hours worked by any employee subject to that rate must be paid at the new rate; hours earned before the effective date are still subject to the old rate, even if they’re paid after the change takes effect.
New Jersey is an innovator in working towards maintaining a living wage
An automatic increase that keeps pace with the agreed-upon national inflation tracking numbers seems like an obvious way to reduce the administrative hassle of trying to regularly pass new legislation to increase wages to keep up with increasing costs of living, but it is relatively uncommon. New Jersey is one of the innovators in passing legislation that includes automatic increases, joining Seattle, Washington and a handful of other states and municipalities. New York City’s Mayor Bill de Blasio recently advocated for a city wage increase to $13 per hour in 2016 with a similar automatic increase provision to correspond with inflation.
Any hours worked by an employee in another municipality with a different rate – for instance, New Jersey employees working in NYC – must be paid at the highest applicable minimum wage rate for where they do the work. (If the local minimum is more than the federal minimum wage, workers are entitled to be paid the higher rate.) Thus, workers may be paid different rates depending on where they are doing the same job, if the jobsites each have different minimum wage rates. As different areas pass different minimum wage laws, it’s important to keep track of where you’re earning your income and the appropriate applicable rate. If you think this might apply to you and have questions, please contact us -- we can help make sense of it all!
Other effects of the minimum wage increase
The new New Jersey minimum wage also indirectly affects tipped employees. Employers may pay tipped employees less than the minimum wage, as long as employees earn enough in tips so that the combination of their wages and tips meets or exceeds the minimum wage. (The amount the employer can reduce the employees’ wages and still meet this requirement is called a "tip credit.") Pursuant to federal law, if an worker spends more than 20% of his or her workweek engaged in non-tipped activity (administrative work, cleaning, maintenance, etc.), an employer cannot take a tip credit for those hours and must pay the full minimum wage for those hours.
The New Jersey Department of Labor and Workforce Development “suggests” a minimum wage of $2.13 for tipped employees (the applicable federal rate) but says the wage rate for tipped employees may be set by the employer. By law, if an employee doesn’t make enough in tips during a given shift to earn at least the applicable minimum wage, the employer has to pay the difference as wages.
No changes were made to the existing overtime laws, which provide that any hours worked beyond forty per week must be paid at one and a half times the employee’s regular wage (i.e., no less than 1.5 times the current minimum wage). Certain employees, in certain industries, remain exempt from the overtime requirements.
If you have concerns that your employer isn’t or hasn’t been complying with any of the minimum wage provisions and think you may have a wage and hour claim, call us now to schedule a consultation. We can evaluate whether you have a claim, and if you do, help you decide the best recourse to recover what you’re owed. Your options may include filing a complaint with the Department of Labor and Workforce Development under the Wage Payment Law or the Wage and Hour Law or filing a claim in New Jersey Superior Court. You may even be entitled to your court costs and reasonable attorney’s fees if your lawsuit is successful.
If you think you have a claim, don’t wait – you must file a claim with the Department of Labor and Workforce Development within two years of your employer’s alleged violation, and the time limits for filing civil actions in Superior Court can be even shorter, depending on the applicable legal claims. Contact us today for help figuring it all out. We’ll be your advocates through every step of the process.