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Florida sued over floating minimum wage calculations

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in Compensation and Benefits,Employment Law,Human Resources

In 2004, state voters approved linking the minimum wage to inflation. All went well for a few years, but now a lawsuit says the state got the math wrong two years ago.

Under Florida’s minimum wage adjustment plan, the state annually tweaks the minimum wage based on the state’s inflation rate. When inflation rises, the state’s Agency for Workforce Innovation (AWI) adjusts the minimum wage upward to account for higher costs. When the state experiences deflation, the minimum wage can’t fall below the federal minimum wage, currently $7.25 per hour.

The tricky part is what happens when the state experiences inflation following a period of deflation. That’s what happened last year, in the wake of the economic slowdown that roiled the state in 2008 and 2009.

The National Employment Law Project and Florida Legal Services filed suit against the AWI, claiming Florida’s minimum wage should be $7.31 per hour, not the federal minimum of $7.25.

The AWI in 2010 lowered the state minimum wage from 2009’s rate of $7.21 to $7.06 to reflect deflation in 2008-2009. The 2010 reduction did not affect minimum wage workers because they were paid the federal minimum wage. But the plaintiffs claim the AWI should have begun its calculations with the $7.21 rate, not the $7.06 rate. If that had happened, the agency would have raised the minimum wage to $7.31 per hour instead of leaving it below the federal rate.

The suit also claims the AWI failed to properly publicize the new rate as required by the state constitution.

The basis for the lawsuit, according to the plaintiffs: a 2004 Florida Supreme Court decision that stated the law “clearly does not provide for decreases in the minimum wage in times of deflation.”

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