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5 Things Florida Employers Need To Know About Vote To Increase Minimum Wage

November 04 - Posted at 11:19 AM Tagged:

Florida voters just approved a constitutional amendment that will gradually raise the state minimum wage to $15 per hour in 2026. What does this mean for employers? Here are the top five things you need to know about yesterday’s groundbreaking election result.

  1. It’s Not All Automatic
    Much of the media coverage on the amendment refers to it as increasing the minimum wage to $15. Although true, it is not the whole picture. Specifically, the amendment states that the Florida minimum wage will increase to $10 beginning September 1, 2021, up from the current $8.46. Every year after that, the minimum wage will increase by $1 until it reaches $15 in 2026 (i.e., $11 in 2022, $12 in 2023, etc.). Beginning in 2027, the minimum wage will resume being adjusted for inflation. Thus, the increases will be gradual.

    Because you will not need to start paying the $10 minimum wage until September 1, 2021, you should take advantage of that time to prepare for the increase. Given that many businesses are struggling with the economic fallout of COVID-19, it is even more important that you brace your organization and plan for the changes. Although it may not be immediately obvious, you will need to adapt to more changes than just an employee’s rate of pay.

  2. Know Where You Stand
    It is imperative that you forecast what your numbers look like a year out and plan ahead of time. You should thoroughly crunch your numbers to see where they stand now and what they will look like after a wage increase. Consider the differences and how your business can cover them. In doing so, you should also consider anticipated staffing needs.

    Many businesses believe that they simply need to sell extra product or service to cover the increased wages. This is not necessarily true. For example, if you only have one employee and they make an extra $2 per hour, you would think you only have to sell an extra $2 of product or service per hour to cover it. But there are more costs associated with employment than just wages. Payroll expenses such as unemployment, disability insurance, workers’ compensation, and Social Security will change. These rates will also increase as the employee’s wage does. You should keep these figures in mind when planning ahead.

  3. Increased Wages Will Send Ripple Effects
    Depending on your business, you may already have employees making $15 or more. When the minimum wage increases, these employees will not be happy to learn they are making the same as your lower- or entry-level employees. These employees will surely want an increase that matches their experience or value. Be sure you are ready to address these wage compression and related concerns, which may involve shifting your pay scale upward.

  4. Tip Credit Is Unchanged
    For employees who customarily earn tips, you can still take a tip credit. The amendment approved by voters does not change that. However, despite the increased minimum wage, Florida employers can still only take a $3.02 tip credit toward the minimum wage.

    Florida law specifically states that employers can take the tip credit that was available to them in 2003. This part of the law has not been amended. Thus, a customarily tipped employee in 2021 must be paid $6.98 in direct wages, while in 2026 they must be paid $11.98.

  5. Compliance Will Be More Important Than Ever
    Florida employers know all too well how expensive wage and hour lawsuits can be, often costing more than the wages allegedly owed. But as wages rise, so too does the risk. For example, an employee earning $15 an hour must be paid at an overtime rate of $22.50 an hour, higher than an employee making $10 with an overtime rate of $15 an hour. This means every hour of alleged unpaid overtime or minimum wage becomes that much more expensive.

    As always, proper recordkeeping is one of the strongest protections against wage and hour suits. It will be critical to implement detailed and consistent recordkeeping systems to make sure that, if a claim comes along, you have all the records you need to defend your business. You must keep accurate records of all hours worked, payments made, and job duties. You should consider auditing your payroll systems to ensure you have all the information you need. After all, an ounce of prevention is worth a pound of cure.

Conclusion

These changes come as employers continue to recover from the effects of COVID-19. However, with proper thought and proactive planning, you can get ahead of the changes and be ready as they come. We will continue to monitor developments related to this new law and its effect on Florida employers. 

Florida’s Minimum Wage Increased as of January 1, 2019

January 02 - Posted at 9:05 PM Tagged: , ,

Florida raised its minimum wage to $8.46 an hour beginning Jan. 1, 2019, up 21 cents from $8.25 in 2018. For tipped employees, the minimum wage will be at least $5.44 an hour.

The minimum wage rate is recalculated each year on Sept. 30, based on the Consumer Price Index. 

Employer found liable for intentionally violating minimum wage requirements are subject to a fine of $1000 per violation, payable to the state in addition to potential civil action law suit. 

Be sure to update your required Florida Minimum Wage Posting to reflect this change. You can download a copy of the new poster here.

Florida’s 2015 legislative session started in March with many employment-related measures being introduced. They include:


SB 98, HB 25: Employment Discrimination Creating the Helen Gordon Davis Fair Pay Protection Act recognizing the importance of the Department of Economic Opportunity and the Florida Commission on Human Relations in ensuring fair pay; creating the Governor’s Recognition Award for Pay Equity in the Workplace; and requiring that the award be given annually to employers in Florida who have engaged in activities that eliminate barriers to equal pay for equal work for women


SB 114, HB 47: State Minimum Wage Increasing the state’s hourly minimum wage to $10.10.

SB 156, HB 33: Prohibited Discrimination Revising the Florida Civil Rights Act to include sexual orientation and gender identity or expression as protected characteristics; and prohibiting discrimination based on perceived race, color, religion, sex, national origin, age, sexual orientation, gender identity or expression, handicap, or marital status.


SB 192, SB 246, HB 1: Texting While Driving Revising penalties for violations of the Florida Ban on Texting While Driving Law to include enhanced penalties when the violation is committed in a school zone and removing requirement that provisions be enforced as secondary action by law enforcement.


SB 214, HB977: Discrimination in Employment Screening (“Ban the Box”) Prohibiting an employer from inquiring into or considering an applicant’s criminal history on an initial employment application, unless required to do so by law.


SB 356, HB 121: Employment of Felons Providing incentives for employment of person previously convicted of felony.


SB 456, HB 325: Labor Pools Revising the methods by which labor pools are to compensate day laborers.


SB 528, HB 683: Medical Use of Marijuana Permitting medical use of marijuana and providing licensure requirements for growers and retailers.


SB 890, HB 455: Florida Overtime Act of 2015 Requiring payment of time-and-one-half an employee’s regular rate of pay for all hours worked over eight in a day, over 40 in a work week, or on the seventh day of any workweek.


SB 892, HB 297: Safe Work Environments Subjecting employees to an “abusive work environment” is made an unlawful employment practice, and retaliation for reporting the practice is prohibited.


SB982, HB 625: Discrimination Based on Pregnancy Amending the Florida Civil Rights Act to prohibit discrimination based on pregnancy, childbirth, or related medical conditions. (The Florida Supreme Court in 2014 held that the Act protects against pregnancy discrimination.)


SB1318, HB 589: State Minimum Wage Making it a third degree felony to procure labor for less than minimum wage, i.e., “with intent to defraud or deceive a person.”


SB1396, HB 433: Employment Discrimination Amending the Florida Civil Rights Act to include unpaid interns within the definition of “employee.”


SB1490, HB 1185: Florida Healthy Working Families Act (“Mini FMLA”) Requiring employers to provide sick and safe leave to employees and creating a complaint procedure, plus a civil cause of action for damages and fees in the event of a violation. Employers of more than nine employees must provide paid sick and safe leave; employers of nine or fewer employees must provide unpaid sick and safe leave.


SB 126: Social Media Privacy Among other things, prohibiting an employer from requesting or requiring access to a social media account of an employee or prospective employee under certain circumstances.


SB 1096: Unemployment Compensation Prohibiting disqualification of victims of domestic violence from receiving benefits if they leave work voluntarily.

Florida’s Minimum Wage to Increase on Jan. 1, 2015

December 12 - Posted at 3:00 PM Tagged: , , , , ,

Florida’s minimum wage is currently $7.93 per hour. Beginning January 1, 2015, Florida’s minimum wage will increase to $8.05 per hour, which is a 1.5% (or $0.12) increase from last year.  

 

Employers of “tipped employees” who meet eligibility requirements for the tip credit under the Fair Labor Standards Act (FLSA) may count tips actually received as wages under the FLSA. The employer, however,  must pay “tipped employees” a direct wage. Effective January 1, 2015, the new minimum wage for tipped employees should become $5.03 per hour plus tips.

 

Florida law requires a new minimum wage calculation each year on September 30, based on the Consumer Price Index. If that calculation is higher than the federal rate (which is currently $7.25 per hour), the state’s rate would take effect the following January.

 

Please contact our office if you need a copy of the 2015 Florida Minimum Wage Poster. Be sure to post the new Minimum Wage Poster by January 1st.

President Obama has proposed expanding the availability of overtime pay, which would cause  the Department of Labor to do its first overhaul of Fair Labor Standards Act (FLSA) regulations in 10 years.

 

The President signed a memorandum on March 13, 2014, instructing the Department of Labor to update regulations about who qualifies for overtime pay. In particular, he wants to raise the threshold level for the salary-basis test from the current $455 per week in order to account for inflation. The threshold has been raised just twice in the past 40 years. The President did not specify the exact amount the threshold should be raised though.

 

“Unfortunately, today, millions of Americans aren’t getting the extra pay they deserve. That’s because an exception that was originally meant for high-paid, white-collar employees now covers workers earning as little as $23,660 a year,” Obama said in his remarks on overtime pay.

 

The memorandum also suggests that both the primary duties and pay of some exempted employees do not truly fit in the executive, administrative and professional employees exemptions, referred to as the white-collar exemptions under FLSA.

 

In a fact sheet on the President’s memorandum, the White House said: “Millions of salaried workers have been left without the protections of overtime or sometimes even the minimum wage. For example, a convenience store manager or a fast food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more, making barely enough to keep a family out of poverty, and not receive a dime of overtime pay.” The FLSA’s minimum wage would not protect a salaried worker because salaried workers’ pay must satisfy the weekly salary-basis test rather than the Federal hourly minimum wage, which is $7.25 per hour. The hourly minimum wage in Florida is currently $7.93 per hour.

 

The memo also pointed out that “only 12% of salaried workers fall below the threshold that would guarantee them overtime and minimum wage protections.“ The fact sheet also called the current FLSA regulations outdated, noting that states such as New York and California have set higher salary thresholds.

 

Small businesses will be hit particularly hard by a change in the FLSA regulations.

 

If the regulations shrink the current white-collar exemptions, employers would have two main options to hold down costs. They would have to either increase workers’ salary above the new salary-basis threshold (to avoid paying overtime) or leave employees in the nonexempt category and pay them overtime. Companies could also hire more employees, but the other two options are more likely. 

 

Implications for HR

Once tightened white-collar exemptions are implemented, which is not likely to happen for months now, it could result in far-reaching implications for HR, including wage and hour audits and layoffs. The money to pay for increased overtime wages has got to come from somewhere which might mean layoffs, reducing overtime and taking a fresh look at the fluctuating workweek.

 

When asked at a press briefing about the burden on businesses if the Obama administration succeeds in efforts to both increase the federal minimum wage and revise FLSA regulations, Betsey Stevenson, a member of the White House’s Council of Economic Advisers, said, “We think these two items are very different, but, obviously, they do feed into the same thing, which is people should be rewarded for fair work.” She suggested that some workers in the white-collar exemptions aren’t even earning minimum wage for all the work they do at low salaries.

 

Even though the president did not assign a number for the minimum salary-basis threshold, Stevenson said the overtime “protections have been eroded over time. This threshold in 1975 was nearly $1,000 in today’s dollars; today it’s $455.” Stevenson believes that the rule should be modernized as a matter of the “basic principle of fairness.”

 

We will continue to keep you abreast of any changes to FLSA as well as other regulations that can impact your business. If you have any questions about the current or proposed FLSA regulations, please contact our office.

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