Fulfilling a signature campaign pledge yesterday, New Jersey Governor Phil Murphy signed into law a multiyear increase in the state's minimum wage, from the current $8.85 per hour to $15 per hour in 2024. The law makes New Jersey the fourth state, following California, New York, and Massachusetts, as well as the District of Columbia, to enact legislation leading to a $15 per hour minimum wage.

In less than five months, the minimum wage will rise to $10 per hour, effective starting July 1. The minimum wage will continue to increase by $1 an hour on January 1 of each year thereafter until it reaches $15 in 2024. At that point, it will grow with inflation, based on the federally calculated Consumer Price Index.

The hike to $15 an hour applies to most New Jersey employees, but not all. "Small employers," defined as those with five employees or fewer, and seasonal employees will have a longer transition, reaching the $15 minimum in 2026. Additionally, for farm workers, the minimum wage will rise to $12.50 in 2024, with subsequent raises dependent on a review of "the impact on farm employers and the viability of the State's agricultural industry of the increases of the minimum wage."

The law also implements a gradual raise for tipped employees and allows employers to pay a training wage to new employees of not less than 90 percent of the minimum wage for the first 120 hours worked. In addition, the law provides tax credits for businesses that employ individuals with disabilities.

Ballard Spahr's Labor and Employment Group routinely assists clients in assessing and complying with state, federal, and local laws and regulations, including applicable wage and hour obligations.

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