Workers' Compensation: New Jersey’s Minimum Wage to Increase to $13/Hour for Most Employees on Jan. 1

New Jersey’s statewide minimum wage will increase by $1 to $13 per hour for most employees, effective January 1, 2022. The increase will be reflected in higher workers’ compensation benefit rates as those are paired with the State Average Weekly Wage (SAWW).

The present disability wage and compensation schedule is based upon the Statewide Average Weekly Wage (SAWW) and establishes percentages for maximum and minimum compensation. N.J.S.A. 34:15-12. Rates for the payment of workers' compensation benefits are statutorily fixed at an amount equal to 70% of the workers' weekly wages received at the time of the accident. Temporary benefits are also subject to a maximum of 75% of the Statewide Average Weekly Wages (SAWW) See also Gelman, Jon L, Workers’ Compensation Law, 38 NJPRAC 16.2-3 (Thomson-Reuters 2021).

The increase is part of legislation signed by Governor Murphy in February 2019 that gradually raises the minimum wage to $15 per hour by 2024 for most employees. When Governor Murphy took office in 2018, the state’s minimum wage was $8.60 per hour; he and the Democratic-controlled Legislature immediately identified increasing the minimum wage as a legislative priority.

Under the law, seasonal and small employers were given until 2026 to reach $15 per hour to lessen the impact on their businesses. The minimum hourly wage for these employees will increase to $11.90/hour on Jan. 1, up from $11.10.

Agricultural workers are guided by a separate minimum wage timetable and were given until 2027 to reach the $15/hour minimum wage. Employees who work on a farm for an hourly or piece-rate wage will see their minimum hourly wage increase to $11.05, up from $10.44. Additionally, long-term care facility direct care staff will see their minimum wage rise by $1, to $16/hour.

“The challenges of the pandemic have shown why it's so important that the Garden State remain on course to a $15 minimum wage,” said Labor Commissioner Robert Asaro-Angelo. “In support of Governor Murphy’s vision for a stronger and fairer economy, we’re working to get our residents into not just jobs, but good jobs with sustainable wages and the generous benefits that come with working in our state.”

The New Jersey Department of Labor and Workforce Development (NJDOL) sets the minimum wage for the coming year using either the rate specified in the law or a calculation based on the Consumer Price Index (CPI), whichever is higher. Once the minimum wage reaches $15 per hour, the state Constitution specifies that it continues to increase annually based on any increase in the Consumer Price Index.

Tipped workers will also see their minimum cash wage rise by $1 to $5.13/hour, with employers able to claim a $7.87 tip credit. If the minimum cash wage plus an employee’s tips do not equal at least the state minimum wage, then the employer must pay the employee the difference. For more on the rights and protections of tipped workers, visit: https://www.nj.gov/labor/worker-protections/myworkrights/tippedworkers.shtml

For more information on the state minimum wage, visit: https://www.nj.gov/labor/wageandhour/support/faqs/wageandhourworkerfaqs.shtml#minimumwage

Recommended Citation: Gelman, Jon L., New Jersey’s Minimum Wage to Increase to $13/Hour for Most Employees on Jan. 1, Workers' Compensation Blog (Dec. 29, 2021),

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Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (Thomson-Reuters). For over 5 decades the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.

Blog: Workers ' Compensation

Twitter: jongelman