New Minimum Wage Established for Employees of Federal Government Contractors in New Jersey

The minimum wage is the lowest amount that an employer can pay to an employee under federal and state law in New Jersey, provided that employee is not exempted from laws governing wages and hours of work. The New Jersey Legislature has established a minimum wage for the state that is greater than the federal rate. Employee advocates have sought amendments to federal law that would raise the minimum wage from its current level of $7.25 per hour to $15 per hour. These efforts have not been successful, but there is good news for some workers in New Jersey. The White House issued an executive order (EO) that will raise the minimum wage for federal government contractors to $15 per hour. The EO will take effect in early 2022. If you are concerned that your employer is not paying you the minimum wage, reach out to a New Jersey employment attorney to learn more about your rights.

Federal Minimum Wage

Congress first established a nationwide minimum wage in June 1938, when it passed the Fair Labor Standards Act (FLSA). The first minimum wage was $0.25 per hour. Congress has amended the FLSA multiple times to raise the minimum wage. The last time this happened was the Fair Minimum Wage Act of 2007, which raised the minimum wage to $7.25 per hour by 2010. See 29 U.S.C. § 206(a)(1)(C).

Based solely on inflation, the original minimum wage of $0.25 per hour would equal about $4.73 today. The overall cost of living has increased more than that, though, and critics of the federal minimum wage argue that $7.25 per hour is not enough to support most individuals, let alone families.

New Jersey Minimum Wage

For most workers in New Jersey who are covered by minimum wage laws, the rate is currently $12 per hour. See N.J. Rev. Stat. § 34:11-56a4, N.J.A.C. § 12:56-3.1(b). That rate will increase by $1 at the beginning of 2022, and again by $1 in 2023 and 2024, until it reaches $15 per hour. After that, increases will be based on the Consumer Price Index (CPI).

State law provides that the state minimum wage will be this amount or the amount set by the FLSA, whichever is greater. In the event that Congress passes a law in 2021 raising the minimum wage above $12 per hour, that amount would supersede New Jersey law.

Minimum Wage for Federal Contractors

The White House issued EO 14026 on April 27, 2021. In 2014, EO 13658 established a minimum wage of $10.10 for federal contractors beginning January 1, 2015, with increases every year based on increases in the CPI. The hourly rate for 2021 is $10.95. The new EO will replace EO 13658.

EO 14026 covers a wide range of federal contracts, including procurement and construction contracts and anything covered by the Service Contract Act. The minimum wage will increase to $15.00 per hour for all contracts entered into on or after January 30, 2022, including renewals or extensions of existing contracts. This minimum wage will also apply to subcontractors hired by federal government contractors.

The Resnick Law Group’s employment attorneys can help you if you have experienced violations of minimum wage laws by your employer in New Jersey or New York. Please contact us online, at 973-781-1204, or at 646-867-7997 today to schedule a confidential consultation to discuss your case with a member of our team.

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