summary
Introduced
03/10/2025
03/10/2025
In Committee
03/10/2025
03/10/2025
Crossed Over
Passed
Dead
01/12/2026
01/12/2026
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill amends the minimum wage law, P.L.1966, c.113, to phase out the credit provided by that law to employers who employ employees who receive gratuities or tips. The bill, over a five-year period, reduces the current credit of $9.87 per hour to $7.90 per hour in 2026, $5.92 per hour in 2027, $3.95 per hour in 2028, $1.97 per hour in 2029, and eliminating the credit in 2030 and all subsequent years, thus providing tipped employees with the same cash minimum wage as other workers. The current law allows an employer of a tipped employee to count the tips received by the employee towards compliance with minimum wage requirements. The eventual elimination of the tip credit by this bill will require that the employer pay the full amount of the minimum wage without regard to any amount of tips received by the employee.
AI Summary
This bill amends New Jersey's minimum wage law to phase out the tip credit for workers who regularly receive gratuities, effectively increasing their minimum wage over a five-year period. Currently, employers can pay tipped workers a lower hourly wage by crediting the tips they receive towards meeting minimum wage requirements. Under this bill, the tip credit will be gradually reduced from $9.87 per hour to $7.90 in 2026, $5.92 in 2027, $3.95 in 2028, $1.97 in 2029, and will be completely eliminated in 2030. This means that by 2030, tipped workers will receive the full minimum wage directly from their employer, without employers being able to count tips as part of their wage compensation. The change aims to provide tipped workers, such as restaurant servers and bartenders, with more consistent and predictable income, ensuring they earn the same base wage as other workers in the state. The bill is part of a broader effort to improve wage standards and economic security for workers in industries where tips have traditionally been a significant part of compensation.
Committee Categories
Labor and Employment
Sponsors (1)
Last Action
Transferred to Assembly State and Local Government Committee (on 04/10/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2024/A5433 |
| BillText | https://pub.njleg.gov/Bills/2024/A5500/5433_I1.HTM |
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