New Jersey’s Minimum Wage Hits $15.49 for 2025

ByDom Castellano

New Jersey’s minimum wage rose to $15.49 per hour on Wednesday, marking the first inflation-adjusted increase following a five-year phase-in that pushed the state’s wage floor above the $15 threshold. The 36-cent bump represents an approximately 2% increase and places New Jersey among the states with the highest minimum wages in the nation.

The latest adjustment completes the initial implementation of legislation signed by Governor Phil Murphy in 2019, which established annual increases designed to reach $15 by 2024 before transitioning to inflation-based adjustments. According to New Jersey Monitor, this marks a significant change from the previous pattern of larger annual increases that had raised the state’s minimum wage by at least $1 per year during the phase-in period.

Continuing a Progressive Wage Policy

When Murphy took office in 2018, New Jersey’s minimum wage stood at just $8.60 per hour. The subsequent increases reflect the administration’s focus on addressing income inequality and cost-of-living challenges faced by working families in one of the nation’s most expensive states.

“This raise accounts for higher costs of living and builds upon the Administration’s efforts to create a stronger, fairer economy that supports the middle class and alleviates wealth inequality,” said Kiran Sheth, a spokesperson for Governor Murphy. “Increasing affordability has been a key objective over the last seven years, showcased by numerous legislative accomplishments and large investments to address issues such as housing, education, and health care.”

New Jersey Labor Commissioner Robert Asaro-Angelo emphasized the importance of tying minimum wage to cost-of-living adjustments, telling FOX 5 NY, “Aligning the state minimum wage with any increases in the cost of living is a critical step towards economic fairness and security for all New Jersey workers.”

Variations for Different Worker Categories

Not all workers in the Garden State will receive the same minimum wage. The law establishes different wage floors for various categories of employment, creating a multi-tiered system that recognizes the diverse nature of the state’s workforce.

For seasonal employees and those working at businesses with five or fewer employees, the minimum wage increased to $14.53 per hour, up from $13.73. Under the current schedule, these workers will continue to see gradual increases until 2028, when their minimum wage will match the standard rate.

Tipped workers will now receive a minimum cash wage of $5.62 per hour, an increase from the previous $5.26. If these workers don’t reach the standard minimum wage of $15.49 after accounting for tips, employers must make up the difference. The maximum tip credit employers can claim remains at $9.87.

For certain long-term care facility staff, the minimum wage now stands at $18.49 per hour, reflecting the state’s recognition of the essential nature of these workers and the challenges in recruiting and retaining talent in the healthcare sector.

Regional Leadership in Wage Standards

With this increase, New Jersey maintains its position as the sixth-highest statewide minimum wage in the country. Only California, Connecticut, New York, Washington, and the District of Columbia have higher base minimum wages.

The wage increase puts New Jersey ahead of most of its regional competitors but still slightly behind New York, where the minimum wage is rising by $0.50 to $16.50 an hour for employees in New York City, Long Island, and Westchester, with the rest of the state seeing an increase to $15.50. Connecticut is also implementing a higher minimum wage of $16.35, up from $15.69.

The regional trend toward higher minimum wages reflects the higher cost of living in the Northeast, where housing, transportation, and other essential expenses typically exceed national averages. These coordinated increases help prevent wage competition between neighboring states while addressing affordability challenges faced by residents throughout the region.

Photo Source: Leco Viana/TheNews2/Deposit Photos

Economic Impact and Debate

While progressive advocates have celebrated the wage increases as essential for working families struggling with inflation, business groups have expressed concerns about the cumulative impact of rising labor costs, particularly for small businesses operating on thin margins.

The inflation-based adjustment mechanism means that future increases will likely be more modest than the dollar-per-year jumps seen during the phase-in period. The consumer price index for urban wage earners and clerical workers – the measure used to calculate the adjustment – rose by approximately 2.4% in the 12 months preceding October 1.

Economic studies on the impact of New Jersey’s minimum wage increases have shown mixed results. Some research indicates minimal employment effects, while other studies suggest that certain sectors, particularly those employing younger or less-skilled workers, may experience adjustments in hiring practices or hours offered.

As the state transitions to this new phase of inflation-adjusted increases, both advocates and critics will be closely monitoring economic indicators to assess the broader impact on workers, businesses, and the overall economy in what continues to be one of the nation’s most closely watched experiments in progressive wage policy.

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