Bill > A3151

Introduced Session

This bill excludes from income taxation the overtime pay of employees who are subject to the minimum overtime rate established under section 5 of P.L.1966, c.113 (C.34:11-56a4). That law requires that employees receive at least 150 percent of their regular hourly wage for each hour of working time in excess of 40 hours in a week. Bona fide executive, administrative, and professional employees are excluded from the overtime regulation and hence the income tax exemption, as are farm laborers, salespersons of motor vehicles, outside salespersons, hotel employees, employees who drive limousines, and employees of common carriers of passengers by motor bus, among others. The legislation also instructs employers not to withhold State gross income tax from tax-exempt overtime compensation. Untaxing overtime pay does not only duly reward hard-working New Jerseyans, but it also provides the economy with a much-needed stimulus. The economy benefits because the tax cut boosts the after-tax income of households with overtime-working income earners. This, in turn, adds to their consumption spending. Moreover, since the tax cut makes overtime more lucrative, it also creates an incentive to work more and hence to improve the State's overall economic performance.

AI Summary

Committee Categories

Jay Webber (R)*,  Dawn Fantasia (R), 

Introduced, Referred to Assembly Labor Committee (on 01/13/2026)

Official Document