It’s a new year which means changes to the minimum wage in New Jersey and Delaware, a new form W4, and updated IRS mileage rates.
Minimum Wage Increases in New Jersey and Delaware
Starting January 1, 2023, many employees in New Jersey making minimum wage will receive an increase of $1.13 per hour, bringing their new hourly wage to $14.13. This is not the case for all classifications of minimum wage pay. Per the State of New Jersey website:
The New Jersey Department of Labor and Workforce Development (NJDOL) sets the minimum wage for the coming year using the rate specified in the law or a calculation based on the CPI, whichever is higher. Once the minimum wage reaches $15 per hour, the State Constitution specifies that it continue to increase annually based on any increase in the CPI.
Under the law, seasonal and small employers were given until 2026 to pay their workers $15 per hour. The minimum hourly wage for these employees will increase to $12.93/hour on Jan. 1, up from $11.90.
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 $12.01, up from $11.05. Additionally, long-term care facility direct care staff will see their minimum wage rise by $1.13, to $17.13.
Tipped workers’ cash wage will increase to $5.26/hour, with employers able to claim an $8.87 tip credit, an increase in the maximum allowable tip credit of $1. 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.
In Delaware the minimum hourly wage has increased by $1.25 to $11.75, with exemptions for employees working in the following areas:
- Agriculture
- Domestic service in private households
- United States Government employees
- Sales personnel receiving outside commission
- Executives, Administrators, and Professionals
- Employees in fishing and fish processing (while at sea)
- Volunteer workers for educational, religious, or non-profit organizations
- Junior Camp Counselors working for non-profit summer camps
- Inmates in Department of Correction work programs
According to the Delaware Department of Labor, the following is the protocol for tipped employees:
The minimum cash wage payable to employees who receive tips is $2.23 per hour. Tips may not be taken or retained by an employer except as required by law. Tip pooling is permitted (under certain circumstances) in an amount not to exceed 15% of the actual tips received by the employee.
A New W4 for 2023
The IRS has issued the new W4 form for 2023. We recommend doing a Paycheck Check-up at the start of every calendar year so you can make any necessary adjustments to your withholdings.
IRS Mileage Updates for 2023
As of January 1, 2023, the IRS standard mileage rates for the use of a vehicle (car, van, pick-up truck, or panel truck, whether electric, hybrid-electric, gasoline, or diesel) for business, charitable, medical, or moving purposes are:
- 65.5 cents for every mile driven for business use
- 22 cents for every mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces
- 14 cents for every mile driven in service of charitable organizations
We recommend tracking your mileage throughout the year using an app like MileIQ. It can save you time and hassle in the long run, as we discuss in this blog post.
We’re Here to Help
If you have any questions about these updates or any other payroll or accounting matter, please don’t hesitate to call 215-723-4881 or contact us online.