PARSIPPANY — New Jersey’s minimum wage will increase to $11.00 on January 1, in another step toward the $15.00 minimum wage enacted in February. Business leaders say that raising the minimum wage will boost consumer buying power, foster a more stable and productive workforce, and strengthen businesses and the economy.
New Jersey is one of 21 states raising its minimum wage at the new year, including six states (New Jersey, California, Illinois, Maryland, Massachusetts and New York) on track to reach $15.00 in the future. Additionally, Washington D.C.’s minimum wage will reach $15 on July 1, 2020 and Connecticut will raise its minimum wage on September 1, 2020 in a step toward $15.00 by 2023.
New Jersey’s law, reflecting a compromise between the governor and legislative leaders, raises the minimum wage to $11.00 on January 1 for businesses with more than five employees (after increasing it to $10.00 on July 1, 2019 for these businesses), with future increases of $1.00 a year to reach $15.00 by 2024, followed by annual cost-of-living adjustments.The minimum wage increases to $10.30 on January 1, 2020 for seasonal workers and businesses with fewer than six employees, eventually reaching $15.00 in 2026 – followed by a two-year period for the slower-path minimum wage to catch up to cost-of-living adjustments in the regular minimum wage by 2028.
“Twenty-one states are ringing in the New Year with minimum wage increases, and that’s great news for business and our economy,” said Holly Sklar, CEO of Business for a Fair Minimum Wage. “It’s vital to remember that workers are also customers, and minimum wage increases boost the buying power of people living paycheck to paycheck. Minimum wage raises also pay off in lower employee turnover, reduced hiring and training costs, lower error rates, better productivity and happier customers.
Kelly Vlahakis-Hanks, CEO of Earth Friendly Products, which manufactures ECOS® brand products in Parsippany (as well as California, Illinois and Washington): “With a higher minimum wage, turnover is lower, productivity is higher and customer service is stronger, helping businesses succeed. We start employees at $17.00 an hour and provide great benefits, and we’re still able to sell our products at competitive prices. Raising the minimum wage is an important investment in American workers and businesses.”
Scheduled increases for December 31, 2019 and January 1, 2020 include:
- Arizona increases to $12 on Jan. 1, 2020 and is indexed for annual cost of living increases starting in 2021
- Arkansas increases to $10 on Jan. 1, 2020 and $11 in 2021
- California increases to $13 on Jan. 1, 2020, $14 in 2021 and $15 in 2022. Small businesses with 25 employees or fewer have an extra year to comply, reaching $15 in 2023. After the minimum wage reaches $15 for all employees, it will be indexed for annual cost of living increases.
- Colorado increases to $12 on Jan. 1, 2020 and indexed starting in 2021
- Illinois increases to $9.25 on Jan. 1, 2020, $10 on July 1, 2020, $11 on Jan. 1, 2021, with future increases of $1 a year to reach $15 by 2025
- Maine increases to $12 on Jan. 1, 2020 and indexed starting in 2021
- Maryland increases to $11 on Jan. 1, 2020, with future increases to reach $15 in 2025. Small businesses with fewer than 15 employees reach $11 on Jan. 1, 2020, with future increases to reach $15 on Jan. 1, 2026.
- Massachusetts increases to $12.75 on Jan. 1, 2020, with increases of 75 cents a year to reach $15 in 2023
- Michigan increases to $9.65 on Jan. 1, 2020, with future small increases until it reaches $12.05 in 2030, “or a subsequent calendar year”
- Missouri increases to $9.45 on Jan. 1, 2020, with future increases of 85 cents a year to reach $12 in 2023 and then indexed
- New Jersey increases to $11 on Jan. 1, 2020, with future increases of $1 a year to reach $15 by 2024 and then indexed. Businesses with fewer than six employees increase to $10.30 on Jan. 1, 2020 and then rise more slowly to $15 in 2026.
- New Mexico increases to $9 on Jan. 1, 2020, with future increases to $12 in 2023
- New York
- New York City increases to $15 on Dec. 31, 2019 for businesses with 10 employees or fewer, putting all businesses in New York City at $15
- Long Island and Westchester increase to $13 on Dec. 31, 2019, $14 in 2020 and $15 in 2021
- The rest of New York State increases to $11.80 on Dec. 31, 2019 and $12.50 on Dec. 31, 2020. Annual increases starting in 2021 will bring the rest of New York to $15 on a schedule to be determined based on cost of living and other indices.
- Washington state increases to $13.50 on Jan. 1, 2020 and indexed for annual cost of living increases starting in 2021
States with indexing where annual cost of living adjustments will take effect January 1.
- Alaska increases to $10.19
- Florida increases to $8.56
- Minnesota increases to $10 for employers with an annual gross revenue of $500,000 or more and $8.15 for employers with less than $500,000
- Montana increases to $8.65
- Ohio increases to $8.70
- South Dakota increases to $9.30
- Vermont increases to $10.96
Looking ahead, Nevada, Oregon and the District of Columbia have increases scheduled for July 1, 2020 and Connecticut will raise its minimum wage on September 1, 2020.
The federal minimum wage has been stuck at $7.25 an hour since July 24, 2009—the longest period in history without a raise. On July 18, 2019, the U.S. House of Representatives passed the Raise the Wage Act, which would increase the federal minimum wage to $15.00 by 2025, but the Senate has not acted.