The coming year is set to usher in quite a few large-scale changes for businesses of all sizes in New Jersey, so starting your preparations now will help keep your workplace compliant and employee-friendly.
Here is a round-up of the main things for which you’ll want to update your HR section come 2020.
New Jersey Minimum Wage Increase
New Jersey’s minimum wage increased to $10 in July of this year, but January 2020 will add another dollar onto the current minimum amount; this trend will continue through 2024 at which point the minimum wage will sit at $15 per hour. Accounting for a dollar per hour per employee adds up pretty quickly, so you’ll want to make sure your HR team revises the year’s budget accordingly.
Similarly, you should account for any pay scale adjustments, salary increases, and maximum earning brackets for the next few years if you haven’t already done so. Not only will this help you budget through 2024 if you’re thorough, it will also ensure that your business stays compliant vis-à-vis employee payment for the foreseeable future.
State Family Leave Adjustments
The Family Leave Act also underwent some aggressive revisions for 2020, with the mandatory paid leave duration increasing from six weeks to 12 for any business with 30 or more employees on payroll. Employees can also take intermittent time as they please, which is a stark contrast to the prior intermittent leave stipulations.
You’ll also find that the definitions around who qualifies as a family member have changed: Employees can now take time off to support anyone close enough to fit the standard definition of “family”—including in-laws, roommates, and distant relatives.
As always, you may have some employees who don’t qualify for paid leave due to lack of time with your company or contractor status. Make sure you’re taking these employees into account when budgeting for paid leave.
As of early 2020, businesses with 20 or more employees will need to implement a pre-tax fringe benefit that allows employees to use public transportation on a discounted or complimentary basis. The details of this proposal are still up in the air, but you can expect to begin supporting your commuter employees sometime in March.
For now, these benefits do not apply to employees who drive their own cars, nor is there a stipulation for employees who carpool. Existing commuter benefit laws or regulations in your area may also affect your bottom line.
Gender Pay Gap Reminder
New Jersey’s recent pay gap legislation requires all businesses to provide proof that women who perform work equal to that of their male counterparts receive the same pay. While there are some liberties you can take regarding the definitions around “equal pay”, the general idea is that people with similar experience doing similar work should merit the same salary.
Failing to provide this proof or pay women equally can lead to a lengthy court case, fines, and—if you’re truly out of compliance—having to pay victims up to six years of compensatory wages. Remember, the gender wage gap isn’t the hill to die on; just pay your female employees correctly.
Retirement: State vs. Homegrown
If your business doesn’t have a retirement plan, you might want to consider implementing one in 2020: New Jersey’s mandatory retirement plan will support any worker who is part of a business with 25 or more employees on payroll within the last year. The current retirement proposal will place three percent of each paycheck in a state-managed IRA, although employees can opt out or adjust the retirement percentage if they choose.
Having your own retirement plan with in-house incentives is generally a better idea due to increased employee morale and retention, but employees will have retirement options regardless in 2020.
*New* Wage Theft Act
In August 2019, NJ Acting Governor Sheila Oliver signed into law the New Jersey Wage Theft Act, which modifies New Jersey’s existing wage and hour laws to protect employees from unfair pay practices. The Act is one of the strongest anti-theft protection laws in the U.S. and has gone into effect immediately. Key provisions of the Wage Theft Act include treble damages for non-payment of wages to New Jersey employees; civil and criminal penalties on employers, corporate officers and any agents involved with management of that corporation, who violate New Jersey wage laws; extension of the statute of limitations from two years to six years; and allows for legal, rebuttable for a legal presumption of retaliation for any adverse employment action that occurs within 90 days after an employee complains about their wages. See our article for full details.
Proposed Overtime Laws
*As of September 24, 2019, the Department of Labor announced the standard salary threshold will be increased from $455 to $684 per week. Click here to read the full alert.*
While the 2020 overtime laws aren’t set in stone yet, you should probably plan for them just in case since estimates indicate they will affect roughly 20 percent of small businesses (anyone who has under 50 employees). Under the proposed laws, employees would have to earn at least $679 per week—as opposed to the former $455 per week—to qualify as exempt from overtime.
It’s worth noting that things like non-discretionary bonuses and incentives can count toward 10 percent of the $679 – so long as employees receive them on an annual, or more frequent, basis. Currently, regular bonuses and non-monetary incentives cannot contribute toward the minimum amount.
Finally, highly compensated employees will need to make at least $147,414 per year—of which at least $679 has to accrue weekly—to be exempt from overtime.
Cover Your Bases
The start of a new year is always a chance to double-check your existing systems and documents to ensure you’re still compliant with state and federal regulations. Here are a few things to look over before kicking off 2020:
- Workplace discrimination countermeasures
- Payroll documents and compliance
- Tax documents
- State legislation tweaks
- Posted legislature
Making sure that all of these items are up-to-date and ready for the new year will save you a lot of hassle—and money—down the line.
It’s also a good idea to update your social media and employee documents before getting back into the swing of things. You might even want to bring some new employee-focused amenities into the office; even upgrading the coffee pot or introducing the infrastructure for occasional remote work can do wonders for your employee morale.
Like any year, 2020 will bring a few incredibly impactful changes—and, potentially, a lot of small ones—to your business’ HR landscape. For more information on how you can keep up with all of the coming year’s adjustments, call Abacus Payroll at (856) 667-6225 today.