A bill to help employers pay teenagers the newly increased minimum wage, which will reach $15 an hour in 2024, passed out of the state Senate Labor Committee on Monday by a vote of 3-0.
The bill, S-3483, would give a tax credit for the extra wages and payroll taxes paid to a worker under age 18 against the corporation business tax or the business’s gross income tax.
Gov. Phil Murphy signed into law a raise in the minimum wage from the current $8.85 to $10 an hour in July, increasing by $1 a year until it reaches $15 in 2024. After that, wages would increase with the Consumer Price Index.
The time is longer for seasonal and farm workers.
The New Jersey Business & Industry Association supported the legislation, saying it would help businesses keep providing essential first jobs to young people.
“This bill would make it feasible for an employer to hire someone under age 18,” said NJBIA Vice President of Government Affairs Mike Wallace. “As the minimum wage increases, employers are going to be less likely to hire youth workers with limited skills.
The bill is one of several measures NJBIA is advocating to help mitigate the negative effects of the minimum wage increase. They include an “economic off ramp” to suspend minimum wage increases in a severe recession or after a natural disaster, providing tax credits to businesses with 10 or fewer employees, and a requirement to study the impact of the minimum wage increase on the economy.
The bill allows a tax credit for the increase in the minimum wage, so it will be available as the wage increases toward $15 an hour as well as after it reaches that amount.