Payroll Compliance Guide for Hotels in New Jersey: 2025 Essentials

Hotel payroll compliance in New Jersey has become increasingly complex in 2025, with new minimum wage rates, pay transparency requirements, and evolving tipped employee regulations creating significant challenges for hospitality employers. From the state's $15.49 minimum wage to the new Pay Transparency Law effective June 1, 2025, hotel operators must navigate a maze of federal, state, and local requirements.

New Jersey hotels face unique payroll challenges—managing tipped employees, overtime for housekeeping staff, complex scheduling for front desk personnel, and compliance with both state disability insurance and federal FLSA requirements. Recent changes include proposed tip credit elimination and enhanced overtime exemption thresholds, making expert guidance essential.

This comprehensive guide covers the 12 critical areas of hotel payroll compliance in New Jersey for 2025, including wage requirements, overtime calculations, tip credit rules, and record-keeping obligations that could save your property thousands in penalties while ensuring fair compensation for your hospitality team.

• Standard Rate: $15.49 per hour for most hotel employees.
• Small/Seasonal Employers: $14.53 per hour.
• Tipped Employees: $5.62 per hour cash wage + $9.87 tip credit.

Critical: If tips plus cash wages don't equal $15.49/hour for any workweek, hotels must make up the difference.

A proposed bill, A5433, aims to eliminate the tip credit by 2030, potentially increasing labor costs by 25-35%.

Hotels with 10+ employees must now include salary ranges and benefits in all job postings, both internal and external.

What to Disclose:

• Hourly wage or salary range.
• General description of benefits.
• Other compensation (bonuses, tips).

Penalties for non-compliance start at $300 per violation.

Non-exempt employees must receive 1.5x their regular rate for hours over 40 in a workweek. For a $15.49/hr employee, that's $23.24/hr for overtime.

New federal exemption thresholds effective July 1, 2025, require a minimum salary of $58,656 annually for most exempt positions like General Managers or department heads.

Roles like assistant managers, supervisors, and front desk staff are typically non-exempt and require overtime pay.

To claim the $9.87/hour tip credit, hotels must ensure tipped employees' total earnings meet the $15.49/hour minimum wage. Employers must inform employees in writing about the tip credit and maintain meticulous records of tips and any tip pooling arrangements.

Key Rules:

• Only tipped employees can be in a tip pool.
• Employers cannot retain any portion of tips.
• Accurate daily and weekly records are mandatory.

NJ hotels must manage a variety of payroll taxes:

• State Income Tax: Withholding based on progressive rates.
• SUI, TDI, PFML: State unemployment, disability, and family leave contributions.
• Federal Taxes: FICA, Medicare, and FUTA.
• Local Taxes: Jersey City imposes an additional 1% payroll tax for non-resident employees.

Misclassifying employees as exempt is a common and costly mistake. The 2025 federal salary threshold for exempt status is $58,656/year. Positions like assistant managers or supervisors are often non-exempt and must be paid overtime, regardless of their title.

While NJ doesn't mandate specific break times, any break under 20 minutes must be paid. Hotels must accurately track all work time, including on-call hours, travel between properties, and event setup/breakdown, as it all counts towards the 40-hour weekly overtime threshold.

Hotels must maintain payroll and timekeeping records for at least 3 years. For tipped employees, this includes daily tip reports and proof that their earnings met the minimum wage. Digital records are acceptable if they are secure, accessible, and legible.

Implement integrated POS and payroll systems to automate compliance. Conduct regular staff training on time and tip reporting. Use a monthly checklist to audit overtime, tip credits, and pay transparency in job postings.

The most common violations involve minimum wage, overtime, and record-keeping. Penalties include back pay, liquidated damages (double pay), and fines up to $1,000+ per violation. Proactive self-audits and professional consultations are the best defense.