New Jersey's Minimum Wage Could Be Higher Than Expected in 2023
Author: Michael Cardman, XpertHR Senior Legal Editor
UPDATE: September 19, 2022 - The New Jersey Department of Labor & Workforce Development (NJDOL) confirmed that the 2023 minimum wage will be $14.13 per hour for large businesses and $12.93 per hour for small businesses and seasonal employers.
UPDATE: August 22, 2022 - In an email to XpertHR, the New Jersey Department of Labor & Workforce Development (NJDOL) confirmed it is possible the 2023 minimum wage could be greater than $14.00 per hour for large businesses and greater than $12.70 per hour for small businesses and seasonal employers. The agency will be able to calculate the 2023 rates when the August CPI-W is published by the federal Bureau of Labor Statistics. NJDOL will publish the official 2023 rate in the New Jersey Register on or before September 30, 2022.
August 11, 2022
Employers operating in New Jersey should prepare for the possibility that the state minimum wage will be greater than anticipated next year.
Under a law passed in 2019, New Jersey's minimum wage is scheduled to increase to $14.00 for most employers. For certain small businesses with five or fewer employees and for seasonal employers, the minimum wage is scheduled to increase to $12.70.
However, included in the law is a little-noticed provision stating that on January 1 of each year, the minimum wage must be increased by the percentage increase in the Consumer Price Index for all Urban Wage Earners and Clerical Workers (CPI-W) for the 12 months prior to the September 30 preceding that January 1.
The statutorily scheduled rate increase applies if it exceeds the inflation-adjusted rate for the year.
Since the law was passed in 2019, the $1.00-per-year scheduled increases have always outpaced the rate of inflation. However, 2023 may prove an exception.
From September 2021 through June 2022, the CPI-W appears to already be 8.7% ((292.542 - 269.086) ÷ 269.086 = 0.0871). So, unless the rate of inflation unexpectedly goes down over the next three months, the New Jersey minimum wage could be at least $14.13 per hour (the current minimum wage of $13.00 per hour × 1.0871) for most employers and at least $12.93 for small and seasonal employers (the current minimum wage of $11.90 × 1.0871).
The New Jersey Department of Labor & Workforce Development did not respond to requests for comment.
If the change in trajectory is formalized, New Jersey would become the second state this year where inflation has resulted in a greater-than-expected increase in the minimum wage, following California.