New Jersey's minimum wage will rise 56 cents to $16.48 an hour on Jan. 1, 2027. New York, by contrast, will keep its rate at $17 in New York City, Long Island and Westchester County and $16 in the rest of the state. The state Department of Labor announced that July nonfarm payrolls were lower than in both January and April, triggering the freeze provision written into the 2023 law. Only the minimum wage for home care workers is an exception, rising to $20.
Starting Jan. 1 next year, the minimum wages of the two states on either side of the Hudson River will go in different directions. On Sept. 29, the New Jersey Department of Labor and Workforce Development announced that the state minimum wage that applies to most workers will rise 56 cents to $16.48 an hour. New York, meanwhile, will keep its rates unchanged in January: $17 in New York City, Long Island and Westchester County, and $16 in the rest of the state.
New Jersey: Increases Vary by Industry
New Jersey's increase varies by industry and employer size. The minimum wage for small employers with fewer than six employees and for seasonal employers rises from $15.23 to $16.25. Agricultural workers go from $14.20 to $15. The minimum wage for direct care staff in long-term care facilities rises 56 cents to $19.48, and the minimum cash wage employers must pay tipped workers increases from $6.05 to $6.61.
For tipped workers, if the combined total of cash wage and tips falls short of the state minimum wage, the employer must make up the difference. If you work in an industry where tips make up a large share of income, such as restaurants, hair salons or car washes, you should check that the cash wage line on your pay stub has changed to $6.61 starting in January.
New York: Freeze Condition in Indexing Law Triggered for the First Time
New York's freeze stems from the inflation-indexing provision created in 2023. Beginning in 2027, the law calls for the minimum wage to rise automatically each year if the three-year moving average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast region increases. However, it requires increases to be halted if any one of three conditions applies: the prior year's consumer price index fell; the state unemployment rate rose by 0.5 percentage points or more; or July nonfarm payrolls were lower than in both January and April of the same year.
In its announcement this October, the state Department of Labor confirmed that New York's July nonfarm payrolls were below both the January and April figures. The third condition was met. Under the law, the department must publish the adjusted rates by Oct. 1 each year, and any increase takes effect on Jan. 1 of the following year. This is the first time the minimum wage has been frozen since the law took effect in 2023.
Because the minimum wage is unchanged, the cash wage and tip credit for food service workers in the hospitality industry also stay the same. In New York City, Long Island and Westchester, the cash wage remains $11.35 with a $5.65 tip credit; in the rest of the state, it remains $10.70 with a $5.30 tip credit. Home care workers are the exception: starting Jan. 1 next year, their minimum wage rises to $20 in New York City, Long Island and Westchester and to $19 in the rest of the state.
A March 1 Increase Is Still Possible
New York Gov. Kathy Hochul has proposed changing the freeze condition itself. Rather than freezing the wage solely because July employment fell, the law would be amended so that a freeze applies only when the decline exceeds a 0.25 percent monthly threshold. If the state Legislature approves, the minimum wage would rise to $17.60 in New York City, Long Island and Westchester and to $16.55 in the rest of the state starting March 1, 2027. The minimum wage for home care workers would also rise once more, to $20.30 and $19.30, respectively.
However, a bill containing the proposal has not yet been introduced in either the state Senate or the Assembly. Discussion is unlikely to begin before the Legislature reconvenes in January next year. The proposal also does not say how the cash wage and tip credit for tipped workers would be adjusted, so specific amounts will not be known until the state Department of Labor amends and publishes its hospitality wage order. Employers would be wise to check their payroll systems so that no automatic increase is applied in January, and to prepare wage notice forms in advance in case of a change in March.