Proposed legislation introduced by New Jersey State Democratic leaders in the past few weeks would increase the state’s minimum wage from $7.25 to $8.50 on July 1, 2012, if passed. The wage hike would also result in an increase in employer’s payroll tax rates. Other taxes will be affected, such as temporary disability, Social Security, worker’s compensation and unemployment insurance. The bill will also tie wages to the Consumer Price Index (a measure of the average a household spends on goods and services over a period of time), and rise automatically every year to offset inflation.
As of March 9, 2012, the State Assembly Labor Committee sent the bill to the full assembly and the Senate Budget Committee, clearing its first barrier. The Assembly bill is out of committee and set for second reading in the Assembly. The Senate bill is still in committee. Both houses are expected to pass this bill once the State Budget process is over. Governor Chris Christie (R) has been public about his support of the wage increase. The increase would make New Jersey’s minimum wage rate the third highest in the country, behind Washington State and Oregon. The minimum wage was last increased was just two years ago to the current rate of $7.25.