New Jersey Minimum Wage: What Small Businesses Need To Know

If you’re running a small business in the Garden State, you’re likely aware that the minimum wage has been steadily rising each year since 2020.*

But did you know that the minimum rates you’ll actually need to pay your people can vary? The final figure depends on a number of factors, like:

• Your business size
• Whether you employ tipped workers
• Changes to planned minimum pay rates approved by the State of New Jersey in line with inflation

It’s a lot to keep up with.

But staying on top of wage and hours law is the only way to accurately plan your expenses and avoid costly mistakes and risks. If you fail to comply with the minimum wage, you could face back payments, fines, and lawsuits you can’t afford — or even lose your business license.

We created this guide to New Jersey minimum wage to help you avoid these pitfalls and make sure you’re clear on how much you need to pay your people. We’ll also give you a roadmap on how to plan for wage changes and put them into practice so you feel confident that your system is compliant.

Current New Jersey minimum wage rates

The New Jersey Department of Labor has set the standard minimum wage at $15.13 per hour for 2024. That means most employers will pay this rate, which works out at $$605.20 per week for employees who work 40 hours.

However, this rate doesn’t apply to all businesses. Small employers, seasonal businesses, and agricultural employers have lower minimum wage rates, while long-term care facilities must pay their staff a higher rate. Businesses can also pay their tipped employees a lower minimum wage, provided the difference is made up for in tips. 

Here are all the minimum wage rates for 2024: 

**A tipped worker is any employee who regularly receives more than $30 per month in tips from customers to show appreciation for the service. Examples include bartenders, restaurant servers, bussers, waitstaff, hair stylists, and hospitality workers.

Employers can choose to claim an $9.87 tip credit for tipped workers, which means they can pay a lower minimum wage ($5.26). Tipped workers should still receive $15.13 in total between their cash wage and tips.

Other specific exceptions to the standard minimum wage requirements include: 

• Automobile salespeople
• Outside salespeople
• Employees of nonprofit summer camps, conferences, and retreats (during summer months only)
• Some full-time students employed by their college or university
• Some minors under the age of 18 (though exemptions don’t apply to minors working retail, food service, beauty culture, and several other industries) 

Pro tip: Take a look at our compliance toolkit and New Jersey Employment Law Guide for a fuller picture of your legal obligations and responsibilities as an employer. Remember, if you have doubts, consult with a compliance expert — Homebase has a team of HR pros ready to help if needed!

Why it’s vital for SMBs to keep up with changing minimum wage rates

As we’ve seen, minimum wage regulations are constantly shifting in line with new policies and inflation in the cost of living.

Staying up to date is crucial because minimum wage laws impact your business at every level. Here are the three main reasons you need to stay on top of pay regulations: 

1. Minimum wage requirements affect your bottom line
2. Minimum wage changes impact how you hire and manage employees 
3. You’re legally obliged to comply with minimum wage requirements

What does that look like for a small business? Let’s take a look.

Minimum wage requirements affect your budget and bottom line

Even a small increase in minimum wage can mean a big difference in what you spend on paying your employees. For small businesses where every dollar counts, you need to plan properly to ensure changes in labor costs don’t mean a hit to your finances.

Let’s see how 2024 increase impacts a local bookstore.

Imagine that your store has seven full-time employees that you pay $15.13/hour each (2024’s minimum wage rate). You will be paying $4,236.40 in base salary every week (before taxes and other expenses). 

That’s $280 more per week the owner needs to come up with if they want to keep making the same profit as last year.

Including minimum wage changes in your budgets and cost forecasts means that there’s less chance that you’ll be taken by surprise. You can decide on a strategy in advance, whether that’s increasing your retail prices or cutting other costs to make up the difference.  

Minimum wage impacts how you manage and schedule employees

Staying on top of minimum wage regulations can help your small business attract and retain great people.

Since higher minimum wages also mean higher labor costs, you’ll also want to make sure you cut down on unnecessary expenses and get the most out of your team.

One way to prepare is by getting greater visibility on the hours your people put in and when and how often they work overtime.

Employees are entitled to at least 1.5 times their normal hourly rate if they work more than 40 hours in a work week, which means the standard minimum wage for overtime is $22.69 in 2024. If you rely heavily on overtime, you’ll need to plan for increased costs or make changes to your employee schedules and workflow. 

You’re legally obliged to comply with minimum wage requirements

Caption: With Homebase’s HR and compliance features, you can feel confident that you’re meeting your legal obligations and protecting your business from legal issues.

Complying with minimum wage laws isn’t a choice — it’s an ethical and legal obligation. 

If you’re not paying people according to the specific rules of your state or jurisdiction, you could face serious consequences, including: 

• Legal issues: If you’re not compliant, you could be subject to back payments, penalties, and fines. Employees may even take you to court and win back payments topped up with interest and legal fees. In severe cases where repeat offenses or large sums of money are involved, you could face criminal penalties. 
• Reputation problems: Word gets around, and if your business is seen as treating employees unfairly, your reputation could take a hit. That might mean losing customers as well as staff. Suppliers and partners may also reconsider your working relationship.
• Loss of your business license: Failing to comply with minimum wage laws leaves you at risk of having your license suspended or revoked by the state.

Simplify your small business compliance challenges with Homebase 

Changes to the minimum wage have major implications on how small companies do business, from budgeting for labor and overtime costs to planning payroll, HR, and compliance. The best way of protecting your business and treating your employees fairly is by staying up to date with minimum wage regulations and meeting your obligations as an employer. 

But that’s easier said than done when minimum payment rates are changing all the time due to new policies coming into force and state governments responding to inflation. 

Homebase is a user-friendly team management solution that takes the stress out of complying with your state’s minimum wage policy. 

• Homebase labor cost control features let SMB owners and managers plan proactively for minimum wage changes. You’ll get accurate labor cost tracking and forecasting tools you can break down by hours, departments, and roles. That means you can schedule smarter, cutting down on overtime costs and making sure you’re not overspending on staff during non-peak hours.
• The payroll tools are a game-changer for paying hourly teams correctly and efficiently. Homebase payroll auto-adjusts hourly rates based on minimum wage rates and timesheets and keeps accurate records so you can prove compliance.
• Homebase HR and compliance alerts owners and managers about upcoming changes to state and federal minimum wage requirements so you can include them in your planning. We have a team of HR Pros on hand to answer any specific questions so you can feel confident you’re doing everything right.

Homebase takes care of the important admin and compliance tasks so you can focus on taking your small business to the next level.