It is common for state wages in NJ and CA to be higher than federal wages, because these state do not recognize some common federal deductions.
I don't know of cities or counties that doe this (they normally key off of the state income), but we don't know which state and which locality you are talking about.
Have you called your employer to find out the source of the different? That would get you the right answer for you, as opposed to us just guessing.
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