Three Employment Issues that Should Be on Your Radar

By Stefanie A. Riehl, NJBIA VP, Business Resources Business Resources/ Member Action Center On Aug 8, 2016

If you focus on only three policy issues this fall, they should include minimum wage, paid sick leave, and new federal overtime rules. All have the potential to turn compensation and benefits practices in New Jersey on their head. Here’s why:

Minimum Wage

There is talk of an amendment to New Jersey’s Constitution to raise the minimum wage to $15 per hour. Even if your workers currently earn above that amount, you may need to plan to increase your compensation. Economists generally agree that a minimum wage increase forces employers to also increase the pay for those workers who are currently just above the minimum wage. Workers often behave as if the minimum wage sets a floor, and they judge how much they are worth by what they are paid relative to the minimum wage. This is one of the side effects of raising the minimum wage beyond obvious consequences to payroll costs. While voters will likely not consider the issue until November 2017, now is a good time to begin thinking about your compensation structure.

Paid Sick Leave 

For several years, statewide legislation has been considered to require all private employers to provide paid sick leave. Separate and apart from that legislation, 12 ordinances have been passed to mandate sick leave at a local level. Under these policies and the proposed state legislation, even if you already have a generous paid time off (PTO) policy, you may be required to allow for the carry-over of time from one year to the next. The policies also require you to keep records of the time every employee takes; prescribe reasons employees can use the leave; and prohibit you from requiring your employees to find their replacements. While New Jersey may be several years away from the passage of statewide legislation, you should be on the lookout for local ordinances and consider your absence and sick leave policies.

Federal Overtime Rules

As of December 1 2016, the amount you need to pay some of your workers to ensure they’re not eligible for overtime is going to increase thanks to new federal rules. The rules apply to employees who may be exempt from overtime because they are executive, administrative or professional and also what’s known as a highly compensated employee. The rules increase the salary you must pay these employees from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). They also increase the annual salary requirements you must pay highly compensated employees from $100,000 to $134,004. Every three years, starting in 2020, the salary levels needed for both exemptions will automatically increase based on a formula.

We know that all of this is little consolation, but we’re here to help. You can ask questions through our Member Action Center (1-800-499-4419, ext. 3, [email protected]) and our free legal hotline operated by Jackson Lewis PC at 844-424-8197.

About the Author: In her role in running a business hotline for the New Jersey Business & Industry Association (NJBIA), Stefanie A. Riehl, vice president, business resources at the association, writes about trending employment issues.

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