Going into 2018 with a sharply lower corporate tax rate, a New Jersey bank plans to increase the minimum wage of tellers and customer service workers to $15 an hour, its chief executive officer said Friday.
Christopher Maher, CEO of OceanFirst Financial Corp., said the move would help keep up with its competitors and attract workers for a job that has become increasingly high skilled.
“These are the folks that spend most of the time with our customers supporting them,” Maher said. “That was the first and most immediate action we could take.”
OceanFirst Financial, the Toms River-based parent company of OceanFirst Bank, has assets of $5.2 billion.
Its decision to increase wages was announced as President Trump signed a sweeping law that will overhaul the U.S. tax code. Among the provisions: Cutting the corporate income tax rate from 35% to 21%.
The law drew mixed reactions from New Jersey business groups. The New Jersey Chamber of Commerce, for example, said Friday it applauded the reduction in business and individual tax rates.
But it said the law penalizes high-tax states like New Jersey because it limits deductions on state and local taxes. The group said it was worried that residents would leave the Garden State for less expensive locations.
Still, corporations with New Jersey operations quickly announced plans for their windfall. Wells Fargo said it would increase its minimum wage from $13.50 an hour to $15 an hour and review the pay of other employees. And both AT&T and Comcast said they would give workers a $1,000 bonus.
Maher walked through the math. He said the company in 2016 paid $12.3 million in federal taxes. If its rate was 21 percent, it would have saved at least $1.2 million.
The tax cut is likely to be worth more to OceanFirst next year. It recently acquired Cape Bank and Ocean City Home Bank in southern New Jersey. And it plans to close on its $487 million acquisition of Mount Laurel-based Sun Bancorp on Jan. 31.
Lower-wage workers aren’t the only ones to benefit. Maher said the tax cut would help the bottom line, leaving him with options ranging from making more loans to increasing the dividend for shareholders. The bank has previously said it would re-examine its dividend in the second half of 2018.
The company’s tellers and customer service staff will see their average pay rise from $13.60 to at least $15 an hour within 30 days. It will affect 166 OceanFirst employees and another 66 Sun Bank employees when that merger is finalized.
Maher said he hopes it will attract higher-skilled workers who not only need to greet customers and count money, but also walk customers through technology.
“The job requirements have increased substantially,” he said. “They’re more sophisticated jobs.”