What NJ’s $15 Minimum Wage Boost Means for Small Business
New Jersey Governor, Phil Murphy, after years of refusal and dispute amongst both major parties, signed the bill raising New Jersey’s minimum wage to $15 per hour for over one million NJ workers.
“We have talked long enough about putting New Jersey on a responsible path to a $15-an-hour minimum wage,” Murphy said before signing the bill. “Today we start our way on this path.”
However, the governor’s signature doesn’t automatically put the law into effect. Rather, it places the state on a 5-year timeline to implement the pay hour pay boost from now through 2024
Cut Staff? Raise Prices? Both?
While praised by employees, the proposed wage increase isn’t met with as much enthusiasm by business owners who say they will likely need to raise prices to pay for it and makes the likelihood of jobs cuts very real for some small businesses.
“It’s not a question of operators making more money,” said Anthony Catanoso, president of Steel Pier, an amusement park in Atlantic City. ” In some cases, it’s operators surviving. There’s just not enough of a margin. We struggle every year. This is just going to make it harder.”
Seasonal businesses are especially at odds with the new law citing that while teens, who make up the majority of their workforce would benefit, a study by the Employment Policies Institute, a research group, predicts a $15-an-hour minimum wage would, in fact, cost Jersey teens a total of 10,473 jobs over the next five years due to job cuts.
Time Will Tell
In light of the wage increase, businesses who rely on hourly employees are now even more conscious of hours worked – embracing technology for cost-effective ways to track employee hours right down to the minute. One way of doing so is through biometric clock software that lets employees punch in/out using fingerprint recognition. This technology virtually eliminates “buddy punching” that on average, accounts for 2.2% of gross payroll, according to the American Payroll Association (APA). This technology helps employers manage schedules and hours in an organized and efficient manner.
For now, the new bill raises New Jersey’s minimum wage from its current level of $8.85 an hour to $10 an hour on July 1, then to $11 an hour on Jan. 1, 2020, before finally rising to $15 an hour by 2024.