Top Democrats in the U.S. Senate and House of Representatives introduced a highly-anticipated bill on Jan. 26 that would increase the federal minimum wage to $15 an hour by 2025, a year after the hourly rate is set to reach that level in New Jersey.

Like with the New Jersey law, the proposed “Raise the Wage Act of 2021” would phase in the increases over several years, rather than an upfront increase from $7.25.

Proponents contend that this approach is vital to avoid a major and sudden cost increases that could yield a considerable blow to employers.

But the proposal comes at a time when reduced capacity and mandated closures force many businesses to close for good, or at least cut their expenses to the bone to stay afloat.

President Joe Biden floated a national $15 minimum wage as a cornerstone of the nation’s COVID-19 economic recovery proposal. He signed an order this week increasing the minimum wage to $15 an hour for all federal employees.

The federal legislation has the backing of Democratic leadership in both houses: House Speaker Nancy Pelosi, D-CA, and Senate Majority Leader Chuck Schumer, D-N.Y.

It was proposed by U.S. Sen. Bernie Sanders, D-V.T., a stalwart progressive lawmaker in Congress. He recently told The Guardian that the measure could be forced through the Senate by budget reconciliation, a maneuver requiring just a simple majority, which Democrats hold in the upper chamber.

Under the plan, minimum wage would jump from $7.25 to $11 an hour effective on Jan. 1, 2022. It would then increase $1 an hour on Jan. 1 of each year, before reaching $15 an hour in 2025.

The measure would phase out the sub-minimum wage for tipped workers, youth and people with disabilities.

New Jersey’s minimum wage law calls for a slower increase for seasonal employers, businesses with no more than five staff, and teenage employees.

Tipped workers receive a lower minimum wage, but employers have to make up the difference if workers do not make it up via tips. Businesses can receive tax credits for wage increases for workers with disabilities.

New Jersey’s minimum wage is currently $12 an hour, after it increased by $1 at the start of January. It was less than $9 when Gov. Phil Murphy signed the minimum wage increase legislation in February 2019.

Murphy campaigned on a $15 minimum wage, and along with progressives and labor rights groups framed it as a means to achieve economic equality across the entire state.

But months of mandated closures, reduced capacity, and requirements for masks, social distancing and sanitization – all meant to slow the spread of COVID-19 until the state builds herd immunity from a vaccine – have eaten into the profits of many employers.

Some businesses are closed indefinitely, while others have shut their doors for good. Unemployment soared to a record high last spring, and nearly 2 million people have filed for jobless benefits since March.

Business advocates and executives warn that with these financial hits of the past year, the additional cost of the minimum wage increase could be particularly devastating.

“It’s a convergence of a rock and a hard place,” Tom Bracken, chief executive officer of the New Jersey Chamber of Commerce, said last month. “People need the money desperately. Businesses are in a very difficult financial situation, probably the worst economic situation faced in their history.”