New Jersey's minimum wage will rise from $15.92 to $16.48 per hour on Jan. 1 next year. Small and seasonal employers with fewer than six employees will pay $16.25, and farmworkers will reach $15 for the first time. The cash wage for tipped employees rises to $6.61, while the tip credit stays at $9.87. In New York, meanwhile, weaker employment data triggered the "off-ramp" provision, so the rates will remain $17 in New York City and $16 upstate in 2027.
The New Jersey Department of Labor has announced next year's minimum wage: $16.48 per hour starting Jan. 1. That is an increase of 56 cents from $15.92 this year.
For Korean American business owners with employees, it is a figure that changes their labor-cost calculations. For hourly workers, it means a little over $90 more per month based on a 40-hour week. The impact will be greater in industries with a large share of hourly staff, such as delis, nail salons, dry cleaners and restaurants.
Amounts vary by industry and business size
New Jersey does not have just one number. For small employers with fewer than six employees and for seasonal employers, the rate will be $16.25, up by more than $1 from $15.23 this year. Because this tier is closing a gap that had built up, the increase is larger.
Farmworkers will be at $15. This is the first time that farm employees paid by the hour or by the amount of work completed will reach the $15 benchmark. Direct care staff at long-term care facilities will earn $19.48.
Tipped employees require one more calculation
This is the part restaurant operators get wrong most often. The cash wage paid to servers rises to $6.61, while the tip credit that can be made up with tips stays at $9.87. Together, they add up to $16.48.
The problem comes on days when tips are low. If the cash wage plus the tips actually received fall short of $16.48 per hour, the employer must make up the difference. It is not enough to say, "We used the tip credit, so we're done"; it is an obligation that must be checked every pay period. This is also the item most commonly cited in wage theft investigations.
Why isn't New York's rising?
The situation is different in New York. On Jan. 1 next year, the rate will stay at $17 in New York City, Westchester and Long Island, and at $16 in upstate regions. It is the same amount for a second straight year.
New York had been set to begin raising its minimum wage from 2027 in line with inflation, using a three-year moving average of the Northeast Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). However, the law also includes an "off-ramp" provision that pauses increases when the economy weakens. That provision was triggered when seasonally adjusted nonfarm employment for July came in lower than in both April and January. The law allows a freeze of up to two consecutive years.
Still, the door is not completely closed. The governor has proposed a bill that would raise the rate to $16.55 upstate and $17.60 downstate starting March 1. Because it must pass the state Legislature, the legislative schedule early next year bears watching.
Across the Hudson River, the minimum wage gap between the two states is narrowing. Currently, the gap is more than $1, with New York City at $17 and New Jersey at $15.92, but from January it will be 52 cents. For businesses hiring in Fort Lee or Palisades Park, it is time to take another look at their pay scales.