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Legislation Expected To Be Introduced To Pause Minimum Wage Increase In Certain Circumstances

Apr 03, 2019

State Senator Vin Gopal (District 11) plans tointroduce three bills that would address potential “negative consequences” of New Jersey’s newly enacted $15 minimum wage law.

The first bill would allow the state to suspend scheduled increases in the minimum wage in two instances- if the State’s employment rate drops or retail sales and tax receipts or total state revenues drop by 2% or more in one fiscal year. The suspension of wage increases would last until those loses in revenue were recouped. Other States, like California, have included similar provisions in their minimum wage laws.

Another bill would establish an 11-member task force to examine the impact of the minimum wage law annually. Members would include administration officials, business representatives and one person nominated by the New Jersey State AFL-CIO. The task forcewould study the impact on small businesses and total labor hours, as well as how different regions of the State are faring under the wage increases.

The final bill would create three tax credits: one for businesses that are less than a year old and have 10 or fewer employees, another for small businesses that offer health insurance to their employees and one for businesses with three or fewer employees that create new positions. The credit would be for each new position added, up to nine employees.

It is unclear whether the bills will have any chance of moving in the Democrat-controlled Legislature, but Senator Gopal has reportedly discussed his proposals with Senate President Steve Sweeney.

Governor Phil Murphy signed legislation (A15) last month that will gradually raise New Jersey’s minimum wage to $15 an hour for most workers by 2024. Under the new law, the current $8.85 statewide minimum wage will rise to $10 an hour on July 1, 2019, and to $11 on January 1, 2020. It will then increase by $1 an hour every January 1 until reaching $15 on January 1, 2024.

Employers across the State, including auto retailers, are concerned about the impact the wage increase will have on businesses in the event of an economic downturn. These bills address that concern and NJ CAR supports Senator Gopal’s efforts to address potential negative consequences of the minimum wage increase.