David I. Rosen, Jill Turner Lever
Employment and Labor
February 26, 2019
New Jersey’s minimum wage rates will
steadily climb to $15 per hour, and both the duration and amount of the state’s
paid family leave insurance benefits will significantly increase, under two
recently enacted laws.
On February 4, 2019, Governor Murphy
signed a bill that substantially increases the state’s minimum wage rate for
non-exempt hourly workers.
Prior to the bill’s enactment, the
state’s minimum hourly wage, as of January 1, 2019, was $8.85. With a few exceptions for seasonal workers
(who work between May 1 and September 30), employees employed by a “small business”
with fewer than six employees, and agricultural laborers, the minimum hourly
wage will rise to $15.00 by January 1, 2024, in accordance with the following schedule:
- 7/1/19: $10.00
- 1/1/21: 12.00
- 1/1/22: 13.00
- 1/1/23: 14.00
- 1/1/24: 15.00
For seasonal workers and employees of
small businesses, the minimum hourly wage rate increases will be more gradual
and will not reach the $15.00 rate until January 1, 2026, based on the
- 1/1/20: $10.30
- 1/1/21: 11.10
- 1/1/22: 11.90
- 1/1/23: 12.70
- 1/1/24: 13.50
- 1/1/25: 14.30
- 1/1/26: 15.00
It will take an even longer period of
time for farm laborers to reach a minimum hourly wage rate of $15, given the
- 1/1/20: $10.30
- 1/1/22: 10.90
- 1/1/23: 11.70
- 1/1/24: 12.50
Any further minimum rate increases for
farm laborers would be tied to the Consumer Price Index for Urban Wage Earners
and Clerical Workers (“CPI-W”).
New Jersey now joins three other states
– California, New York and Massachusetts – as well as the District of Columbia in
committing to minimum hourly wage rates that significantly exceed the current
federal minimum hourly wage rate of $7.25.
Business groups in New Jersey have
voiced two principal objections to the new minimum rates. First, the numbers threshold for meeting the “small
employer” exception is relatively low – employers with six or more employees do
not satisfy it. Second, the New Jersey
statute, unlike the California and New York laws, makes no provision for suspending
scheduled minimum hourly rate increases in the event of deteriorating economic conditions
in the state.
On February 19, 2019, Governor
Murphy signed into law a bill that substantially expands the job-protected family leave
requirements applicable to smaller employers under the New Jersey Family Leave
Act (“FLA”), as well as expands the monetary benefits available under the paid
family leave insurance (“FLI”) and temporary disability insurance (“TDI”) programs
for employees employed in New Jersey.
Under the state’s leave and benefit
programs (which must be coordinated with applicable federal requirements), an
eligible employee may take time off from work and receive family insurance
benefits during such leave to, among other things, care for a newborn child or
a covered family member who is suffering from a serious health condition.
- There no longer is a one-week waiting period
before FLI benefits may be received.
- Covered family members under the new law now
include siblings, grandparents, grandchildren, and parents-in-law, as well as others
related to the employee by blood or who have a “close association with the
employee” which is equivalent to a family relationship (though evidence of same
must be provided by the employee).
- FLI benefits may also be taken by a covered
employee while taking time off from work pursuant to the NJ Security and
Financial Empowerment Act (“SAFE Act”), to assist a covered family member who
is a victim of domestic or sexual violence.
- An employer may not retaliate against an
employee with respect to compensation, terms, conditions or privileges of
employment because the employee took or requested any TDI or FLI benefits.
Effective June 30, 2019, NJ
businesses employing at least 30 employees will be covered by the FLA and may
not retaliate against employees returning from family leave by refusing to
reinstate them, down from a 50 employee threshold.
Commencing July 1, 2020, the
maximum duration of FLI leave benefits will increase from 6 to 12 weeks during
any 12-month period; in cases of intermittent leave, the maximum FLI leave will
increase from 42 days to 56 days.
Further, the dollar amount of weekly FLI benefits will increase from
two-thirds of a claimant’s average weekly wage to 85% of an employee’s average
weekly wage, capped at $859 per week.
Although FLI benefits are funded
entirely by employee contributions, NJ-based businesses have raised concerns
that the broader eligibility for FLI leave, and the longer duration of such
leaves, will increase business costs due to the need to pay more overtime wages
to assure adequate staff coverage, or employ more temporary replacement workers,
while eligible employees are out on leave.
These increases may also lead to greater work load demands placed on regular
employees who must cover while co-workers are out on such leave.
NJ employers should assure that the wage
rates they pay their employees meet the new NJ minimum wage rate thresholds.
Further, NJ employers should review and update
their family leave policies to ensure that they comply with the requirements of
the new law, which is complicated and substantially amends multiple existing
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