New Jersey has passed a bill that will forge an alliance with some the nation’s most progressive states, including California, Massachusetts, New York, and the District of Columbia. The bill requires employers to pay a minimum wage of $15 an hour, a significant leap from the current rate of $8.86. While Democrats and Republicans do not always see eye to eye on many issues, few have been so starkly polarizing. Not a single Republican voted for the bill, which was signed into effect on February 4, 2019.
Critics of the new law do not contest that the increase is undoubtedly a fair boon to entry-level employees. However, many do question its prudence in regard to small business owners, who may not be able to keep their doors open after the law takes effect. The concern is that few will survive such a sharp increase to what is already an employer’s largest expense. Others contend that this will force companies to find more inventive ways to automize jobs, eliminating the need for a human employee all together. Still others are concerned that every salary will need to be increased proportionately in order to stay fair and equitable to mid-management and management employees.
On the other hand, proponents of the bill are confident that they struck a healthy and sustainable compromise between employer and employee. The increase is scheduled to phase in slowly over the course of the next six years, not to reach maturity until 2024. Employees will not see the first boost to their paychecks until July of this year, when it will jump to $10 an hour. Wages are then scheduled to rise $1 an hour every year thereafter. The law takes into consideration certain businesses that may not be able to survive the wage inflation and offers longer phase-in timelines. In addition, allowances for tip-based salaries, agricultural jobs and youth workers may not be subject to the increase.
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