NEWARK -- In an effort to promote local hiring amid future commercial development, Newark's council on Thursday approved a payroll tax cut for businesses that employ more than 50 percent local residents.

"That is a promise to, and an incentive to Newark corporations to hire Newarkers," city council president Mildred Crump said. "It's an encouragement for all businesses."

Under the ordinance, employers will not have to pay the 1 percent payroll taxes on Newark employees as long as more than 50 percent of the staff is local. Companies will still have to pay the tax for non-local employees.

Newark is the only city in the state with a payroll tax that requires employers pay the city 1 percent on their employees' wages.

Central Ward Councilwoman Gayle Chaneyfield Jenkins, however, said the city also needed to improve its enforcement of the tax.

Business administrator Jack Kelly said the new ordinance will bring clarity and help the city track payments.

During Wednesday's unveiling of Mulberry Commons, a 22-acre downtown development, Mayor Ras Baraka said the measure will aid retail and commercial businesses coming to the city.

"New businesses, smaller, mid-sized businesses, Whole Foods, will be able to benefit from that," Baraka said. "A lot of these businesses complain about the payroll tax so it gives them the opportunity to hire Newark residents and get a direct benefit."

A second ordinance to require affordable housing in residential developments with more than 30 units was deferred by the council pending additional discussion.

Karen Yi may be reached at kyi@njadvancemedia.com. Follow her on Twitter at @karen_yi or on Facebook.