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New Jersey Voters Approve Constitutional Amendment to Increase Minimum Wage

New Jersey voters approved, 61 to 39 percent, an amendment to the state constitution that increases the state’s minimum wage to $8.25 per hour for non-exempt employees, a $1 per hour increase from the current $7.25 per hour minimum wage. Under the amendment, each year on September 30 the minimum wage will increase if the consumer price index (CPI) increases, with the revised minimum wage taking effect the following January 1. If, however, the federal minimum wage, which is currently $7.25 per hour, exceeds the state rate, the state rate will increase to match the federal rate, and further revisions based on the CPI  will be based on the increased, matched rate.

New Jersey’s minimum wage statute does not address how tipped employees must or may be paid. Per the state labor department, a tipped employee’s hourly wage plus tips must equal at least the minimum wage. The department contends the hourly rate is set by the employer, though it recommends a minimum of $2.13 per hour for tipped employees, which is the rate set by the federal Fair Labor Standards Act. Accordingly, effective January 1, 2014, an employer can comply with state minimum wage provisions by paying a tipped employee a minimum cash wage of $2.13 per hour if he or she makes at least $6.12 per hour in tips. If the employee does not make at least $6.12 per hour in tips, an employer must make up the difference between the wages an employee actually received (hourly wage plus tips) and the amended state minimum wage of $8.25 per hour.

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