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Preparing for Florida’s minimum wage hike

by on
in Compensation and Benefits,Human Resources

Florida’s minimum wage rises to $6.79 per hour on Jan. 1, 2008. Florida law requires the Agency for Workforce Innovation to adjust the minimum wage annually to reflect changes in the U.S. Consumer Price Index for urban wage earners and clerical workers in the South. The index rose 1.85% in the year ending Sept. 1, 2007.

Florida’s minimum wage continues to outpace the federal minimum wage of $5.85 per hour. Even with the scheduled July 24, 2008, boost, the federal minimum wage will rise to only $6.55. Federal law requires employers to pay employees the higher of the federal or state minimum wage.

Because of Florida’s annual adjustments, the state minimum wage will most likely remain ahead of the federal minimum for years to come, even when the federal rate rises to $7.25 on July 24, 2009. Florida will adjust its minimum wage again on Jan. 1, 2009.

Making the transition

Jan. 1 falls on a Tuesday. Employers that pay weekly or biweekly may find they have to pay two rates during that pay period. The law doesn’t care when your pay periods begin and end. All pay for work performed on or after Jan. 1 must be at least $6.79 per hour.

So, employers whose pay periods straddle New Year’s Day have two options:

  1. Start paying the new wage a few days early, beginning with the start of the straddling pay period.
  2. Change wages with the new year.

Check your payroll software or service to see which option is best.

Depending on your wage structure, the minimum wage increase may boost more than just the bottom wage rung. Workers earning just a little more than minimum wage may find themselves making the same amount as workers who were previously earning less. This could create some workplace friction.

Check your pay scales to see if you should give pay raises to more than just minimum-wage workers. For instance, supervisors should be paid more than those they supervise. Some options:

  • Employers can increase all workers’ pay rates by the same percentage as the minimum wage increase.
  • They can decrease the difference between the bottom pay grades by giving little or no increase to those just above the minimum wage earners, as long as everyone remains in their proper pay strata.

Keep ’em posted

With the new wage comes a new poster. Florida employers must display the new minimum wage poster prominently in the workplace. The poster must be visible in parts of the workplace where all workers have access. Lunchrooms, break rooms, employee lounges or similar areas are good locations. You can download the new poster from www.floridajobs.org/resources/fl_min_wage.html. Click on “2008 minimum wage poster.” The poster is available in both English and Spanish.

Exempt or nonexempt?

Except for the minimum wage, the Florida Minimum Wage Act follows the federal Fair Labor Standards Act (FLSA) in all respects. Specifically, workers exempt under the FLSA also are exempt under the state law. (For details on the FLSA, go to www.dol.gov/flsa.)

As specified in the federal law, nonexempt employees in Florida are entitled to one-and-a-half times their regular pay for each hour over 40 they work in a week.

 

Note: Although the minimum wage is going up to $6.79, the credit employers may allow for tipped employees remains at its 2003 level of $3.02. Employers must ensure that the combination of wages paid and the tip credit add up to at least the minimum wage. So effective Jan. 1, employers must pay tipped employees at least $3.77 per hour ($3.77 + $3.02 = $6.79).

 

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