An Act increasing the minimum wage and amending P.L.1966, c.113.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 5 of P.L.1966, c.113 (C.34:11-56a4) is amended to read as follows:

5. Every employer shall pay to each of his employees wages at a rate of not less than $5.05 per hour as of April 1, 1992 and, after January 1, 1999 the federal minimum hourly wage rate set by section 6(a)(1) of the federal "Fair Labor Standards Act of 1938" (29 U.S.C. s.206(a)(1)) for 40 hours of working time in any week and 1 1/2 times such employee's regular hourly wage for each hour of working time in excess of 40 hours in any week, except this overtime rate shall not include any individual employed in a bona fide executive, administrative, or professional capacity or, if an applicable wage order has been issued by the commissioner under section 17 (C.34:11-56a16) of this act, not less than the wages prescribed in said order. Commencing in 2002, the commissioner shall, no later than April 1 of each year, adjust the minimum hourly wage rate set forth in this section to make it equal to 30% of the average hourly wage for all workers in this State and the adjustment shall become effective on July 1 of that year, unless the federal minimum hourly wage rate is greater, in which case the federal minimum hourly rate shall prevail. For the purposes of this section, the "average hourly wage for all workers in this State" shall be one fortieth of the Statewide average weekly wage paid to all workers subject to the "unemployment compensation law" (R.S.43:21-1 et seq.) as determined and promulgated by the commissioner. The wage rates fixed in this section shall not be applicable to part-time employees primarily engaged in the care and tending of children in the home of the employer, to persons under the age of 18 not possessing a special vocational school graduate permit issued pursuant to section 15 of P.L.1940, c.153 (C.34:2-21.15), or to persons employed as salesmen of motor vehicles, or to persons employed as outside salesmen as such terms shall be defined and delimited in regulations adopted by the commissioner, or to persons employed in a volunteer capacity and receiving only incidental benefits at a county or other agricultural fair by a nonprofit or religious corporation or a nonprofit or religious association which conducts or participates in that fair.

The provisions of this section for the payment to an employee of not less than 1 1/2 times such employee's regular hourly rate for each hour of working time in excess of 40 hours in any week shall not apply to employees engaged to labor on a farm or employed in a hotel or to an employee of a common carrier of passengers by motor bus or to a limousine driver who is an employee of an employer engaged in the business of operating limousines or to employees engaged in labor relative to the raising or care of livestock.

Employees engaged on a piece-rate or regular hourly rate basis to labor on a farm shall be paid for each day worked not less than the minimum hourly wage rate multiplied by the total number of hours worked.

Full-time students may be employed by the college or university at which they are enrolled at not less than 85% of the effective minimum wage rate.

Notwithstanding the provisions of this section to the contrary, every trucking industry employer shall pay to all drivers, helpers, loaders and mechanics for whom the Secretary of Transportation may prescribe maximum hours of work for the safe operation of vehicles, pursuant to section 31502(b) of the federal Motor Carrier Act, 49 U.S.C.s.31502(b), an overtime rate not less than 1 1/2 times the minimum wage required pursuant to this section and N.J.A.C.12:56-3.1. Employees engaged in the trucking industry shall be paid no less than the minimum wage rate as provided in this section and N.J.A.C.12:56-3.1. As used in this section, "trucking industry employer" means any business or establishment primarily operating for the purpose of conveying property from one place to another by road or highway, including the storage and warehousing of goods and property. Such an employer shall also be subject to the jurisdiction of the Secretary of Transportation pursuant to the federal Motor Carrier Act, 49 U.S.C.s.31501 et seq., whose employees are exempt under section 213(b)(1) of the federal Fair Labor Standards Act, 29 U.S.C.s.213(b)(1), which provides an exemption to employees regulated by section 207 of the federal Fair Labor Standards Act, 29 U.S.C.s.207, and the Interstate Commerce Act, 49 U.S.C.s.501 et al.

(cf: P.L.1999, c.370, s.1)

2. This act shall take effect immediately.

STATEMENT

This bill increases New Jersey's minimum wage rate and establishes a new method of determining the minimum wage in the future.

Commencing in 2002, the Commissioner of Labor is required, not later than April 1 of each year, to adjust the State minimum hourly wage rate to make it equal to 30% of the average hourly wage for all workers in this State, with the adjustment becoming effective on July 1 of that year, unless the federal minimum hourly wage rate is greater, in which case the federal minimum hourly rate will prevail. For the purposes of the bill, the "average hourly wage for all workers in this State" means one fortieth of the Statewide average weekly wage paid to all workers under the "unemployment compensation law" (R.S.43:21-1 et seq.).

The bill, as of July 1, 2002, increases New Jersey's minimum wage rate from its current level of $5.15 per hour to $6.29 per hour, which is 30% of the $20.96 average hourly wage for all New Jersey workers.

The current New Jersey mininum wage of $5.15 per hour is only 24.6% of the average hourly wage in the State, the lowest percentage on record. In 1974, the minimum wage was 46.0% of the average hourly wage. Moreover, a full-time worker paid New Jersey's current minimum wage receives $10,300 per year, far below the national poverty level of $17,650 per year for a family of four.

The bill is designed to sustain New Jersey's minimum wage at an appropriate level in light of New Jersey's high cost of living, which is more than 15% higher than the national average, and to prevent workers earning the minimum wage from falling increasingly behind the wage levels of average workers. An increase in the minimum wage is appropriate to lift the incomes of tens of thousands of hard-working New Jersey citizens.