New Jersey Governor Vetoes Proposed Minimum Wage Increase

Governor Chris Christie this week vetoed the legislation to raise New Jersey's Minimum wage to $15. The legislation was passed by the State Legislature on June 23rd and raised the state's minimum wage (currently at $8.38 per hour) to $10.10 per hour effective on January 1, 2017, with annual increases of at least $1.25 every year until 2021 until the minimum wage rate will reach $15.00 per hour. The $15 per hour rate represented a nearly 80 percent increase over the current minimum wage.

Three years ago, a state constitutional amendment (approved by the voters) raised the wage to $8.25 an hour and then tied it to the rate of inflation in the future. Christie said that New Jersey businesses would not be able to absorb the increased labor costs and have to lay off workers or cut their hours. State Senate President Stephen Sweeney favors the increase saying that it is a desperately needed "economic lifeline."

Comment: An increase in the minimum wage to $15 per hour would also increase (for minimum wage workers) the rate of both workers' temporary total and partial total rates and thus increase employers' costs of workers' compensation claims.