The Assembly Labor Committee advanced a measure Thursday that increases the state minimum wage to $15 an hour, following several hours of sometimes emotional testimony from social justice organizations, lawmakers, minimum wage employees, and business owners and advocates.
Assembly Bill 15, which the committee approved in a 6-3 vote along party lines, will now head to the Senate Budget and Appropriations Committee on Monday, then to a likely full floor vote in both the Assembly and Senate on Jan. 31.
Gov. Phil Murphy said he expects to sign the bill by the end of January, which would mark one of his biggest policy wins since his first ever State of the State address on Jan. 15.
The statewide minimum wage would reach $15 an hour for most workers by 2024 under A15, sponsored by Assembly Speaker Craig Coughlin, D-19th District.
“It will lift working individuals and their families out of poverty,” Coughlin testified at the Thursday morning committee. “No one living in New Jersey working full time should be living in poverty. This will take the next step in making sure that doesn’t occur.”
Coughlin, Murphy and Senate President Stephen Sweeney, D-3rd District, struck a deal on minimum wage on Jan. 17, two days after Murphy’s first State of the State address.
Seasonal workers and employees of businesses with less than six workers will see their wage raise to $15 an hour by Jan. 1, 2026. Seasonal workers could only be employed between May 1 and Sept. 30 under the legislation, which is crafted to apply to workers at beach-related jobs along the Jersey Shore.
Farm workers’ wages will increase to $12.50 an hour no later than 2024 and tipped workers will see the minimum rate go up from $2.13 an hour to $5.13 an hour.
A15 also sets aside $10 million of tax credits to incentivize employers to hire workers with disabilities.
Under the proposed tax credit, if a business has to pay a disabled employee more in the current year than they did prior year, because of the wage increase, that employer could count the pay difference as a tax credit against the taxes the employer already owes. The tax credit would be applicable to any wages paid after Jan. 1, 2019.
Starting Jan. 1, 2020, the measure also allows employers to pay a worker a so-called “training wage” of 90 percent the minimum wage for the first 120 hours of work.
The groups also criticized the definition of small businesses as more than five employees — A15 originally set the threshold at 10 employees — which they argued was far too low a number.
“We believe a small business that has 10, 25, or even 50 employees would be greatly impacted by this change to the legislation,” said Tom Bracken, president of the statewide chamber.
“Employers will either be cutting employee hours or benefits, raising prices, or automating. Some will move out of the state,” NJBIA President and CEO Michele Siekerka testified Thursday. “When margins are tight, you have two choices — increase your revenue or cut your expenses… Where do you turn? Yes, you cut expenses.”
Bracken disputed the notion that the bill would have a net benefit for up to 1 million New Jersey workers in the next year, and suggested the actual number would be closer to 150,000 residents.
“The proposed legislation is too aggressive, does not go into detail on the real economic impact for businesses, nor the economy of New Jersey, nor the future of New Jersey, “Bracken testified.
“The upside benefits are” overstated, Bracken said, and the “downside risks are considerably greater than what is being acknowledged.”
Social justice organizations such as New Jersey Working Families said measure will be a major win for the state’s neediest residents because wage increases will boost the purchasing power of many state residents.
“This bill goes beyond lifting up the working poor, but extends the benefits to the local economy as consumers will have more buying power,” NJ Working Families Director Analilia Mejia said Thursday.
A15 covers government workers, including county, municipal, state and school district employees. That provision drew wariness from local governance associations such as the New Jersey League of Municipalities and the New Jersey Association of Counties.
Michael Cerra, the League’s assistant executive director, said towns would still need to comply with the yearly 2 percent cap on cost increases and could resort to cutting services to accommodate the mandated increases.