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New York Raises Minimum Wage Rate; New Jersey May Not Be Far Behind

In his State of the Union Address on February 12, 2013, President Obama called on Congress to raise the federal minimum wage to $9.00 per hour, from its current hourly rate of $7.25. Although it remains unclear whether Congress will heed the President’s call, various states, including New York and New Jersey, have already enacted or are actively considering new minimum wage rates that exceed the existing federal minimum wage rate “floor.”

New York’s newly passed budget provides for incremental minimum wage rate increases at the end of 2013, 2014 and 2015, culminating in a $9.00 per hour rate. This Fall, following Governor Christie’s conditional veto of a wage rate increase bill, NJ voters will be asked to vote on a proposed Constitutional amendment, which would initially raise the minimum rate to $8.25 and thereafter would potentially raise it further every year based on the Consumer Price Index (“CPI”). Details on both of these developments follow.

New York

On March 28, 2013, the New York Legislature passed a budget for fiscal year 2013-14 which includes a measure to incrementally increase the state’s minimum wage from $7.25 per hour to $9.00 per hour over a period of three years. Pursuant to this measure, the minimum wage will hold at $7.25 per hour until December 31, 2013, when it will increase to $8.00 per hour. On December 31, 2014, the minimum hourly rate will again increase to $8.75 per hour, and on December 31, 2015, the rate will further increase to $9.00 per hour.

The budget measure, in contrast to a March 5, 2013 bill passed by the State Assembly but never signed into law, does not index future increases in the minimum wage to inflation. Additionally, it does not cover “tipped” employees, a category which includes, among others, waiters and waitresses, nail salon employees, car wash employees, and certain airport employees.

New Jersey

On January 28, 2013, Governor Christie conditionally vetoed a bill passed by the New Jersey General Assembly on December 17, 2012, which would have increased New Jersey’s minimum wage to $8.50 per hour from its current rate of $7.25 per hour, while also tying future increases to the CPI.

The determination of whether minimum wage earners in New Jersey will earn more beginning in 2014 will now be left to the ballot box. On November 5, 2013, the New Jersey Minimum Wage Increase Amendment (the “Amendment”) will appear on the general election ballot. This ballot measure will ask voters if they “approve [of] amending the State Constitution to set a minimum wage rate of at least $8.25 per hour,” while informing voters that “[t]he [A]mendment also requires annual increases in that rate if there are annual increases in the cost of living.” If a majority of voters supports the Amendment, New Jersey’s minimum wage will, effective January 1, 2014, increase to $8.25 per hour. Thereafter, on September 30 of every year, whenever triggered by a rise in the CPI, future minimum wage rate increases will follow.

The Amendment, unlike the vetoed bill, does not require gubernatorial approval and automatically will become law if approved by a majority of the voters.

Companies employing individuals in either New York or New Jersey should evaluate whether any of those employees are, or may be, subject to an hourly wage hike based on either of these initiatives. 

This Alert has been prepared by Sills Cummis & Gross P.C. for informational purposes only and does not constitute advertising or solicitation and should not be used or taken as legal advice. Those seeking legal advice should contact a member of the Firm or legal counsel licensed in their state. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. Confidential information should not be sent to Sills Cummis & Gross without first communicating directly with a member of the Firm about establishing an attorney-client relationship.    

Copyright © 2013 Sills Cummis & Gross P.C. All rights reserved.

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About this Author

Damon W. Silver, Sills Cummis law firm, Labor law attorney
Associate

Damon W. Silver is an Associate in the Sills Cummis & Gross Employment & Labor Practice Group.  He was a 2011 Summer Associate at the Firm.

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David I. Rosen, Sills Cummis Law Firm, Labor Law attorney
Member

David I. Rosen has practiced labor and employment law on behalf of management clients since 1977. He handles employment litigation in the federal and state courts, before administrative agencies and through arbitration and mediation, and has broad experience with wrongful dismissal and employment discrimination claims, having successfully defended employers following jury and bench trials. His litigation experience extends to the enforcement and defense of restrictive covenants, NLRB unfair labor practice trials and appellate advocacy. Mr. Rosen also represents employers in labor...

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Galit Kierkut, Employment Litigation Attorney, Sills Cummis, Law firm
Member

Galit Kierkut concentrates her practice on employment litigation and counseling. She conducts human resources audits, performs management and employee training in all areas, including sexual harassment, social media and electronic communications use, and counsels clients regarding compliance with state and federal employment laws, including discrimination laws, the Fair Labor Standards Act (FLSA), family and medical leave, and the Worker Adjustment and Retraining Notification (WARN) Act. She also reviews and drafts employee handbooks, social media policies and employment contracts,...

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