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New Jersey Governor Vetoes Minimum Wage Increase, Legislature Puts Issue on November Ballot

  • February 21, 2013

New Jersey’s Governor Chris Christie has vetoed legislation passed by the New Jersey Senate and Assembly (S3/A2162) that would have raised the state’s minimum wage from $7.25 an hour to $8.50 an hour and based future increases on the consumer price index (CPI). While issuing his conditional veto on January 28, 2013, Governor Christie proposed a $1-an-hour raise in the minimum wage that would be phased in with a 25-cent increase this year, a 50-cent increase in 2014, and another 25-cent increase in 2015. He also proposed a 25-percent increase to the state’s Earned Income Tax Credit, which would be implemented fully in taxable year 2014. The Governor’s office stated that the EITC increase would provide a $550 benefit for struggling working families. 

Governor Christie stressed that he vetoed the minimum wage bill because he did not want to harm the state’s economic recovery in the wake of Hurricane Sandy. (The Hurricane battered much of the New Jersey coastline late in October 2012.) He mentioned in particular his interest in protecting small- and medium-sized businesses. Some believe these businesses may not be ready immediately to take on the burden of a 17-percent wage increase all at once. 

Responding to the Governor’s veto, both houses of the New Jersey legislature approved a resolution (SCR1) allowing voters to consider a constitutional amendment to raise the minimum wage to $8.25 an hour, with future increases tied to the CPI. The resolution also provides that if the federal minimum hourly wage rate is raised to a level higher than the state minimum wage rate, the state rate will increase to match the federal rate. The resolution will appear on the November ballot for the voters’ decision. Unlike the bill, the ballot initiative would not be subject to the Governor’s veto. 

New Jersey’s minimum wage rate is $7.25 an hour, the same as the federal rate. Had the proposed increase to $8.50 an hour passed, New Jersey would have had the third-highest minimum wage in the U.S., with only Washington and Oregon employers paying higher rates. According to the U.S. Department of Labor, 10 states have minimum wages that are linked to the CPI.

We will provide further updates on the New Jersey minimum wage as warranted. If you have any questions about this or other wage and hour developments, please contact the Jackson Lewis attorney with whom you regularly work. 

 

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