Florida Amendment 2, the $15 Minimum Wage Initiative, was on this election’s ballot as an initiated constitutional amendment. On November 3rd, 2020, it was approved with just over 60% of voters electing yes. This constitutional amendment will raise the minimum wage each year until it reaches $15 in 2026. Beginning 2027, Florida’s minimum wage will be adjusted annually by Florida’s Department of Economic Opportunity. As an employer, this information is important as payroll procedures and wages will be changing yearly. Alltrust Insurance has put together everything you need to know to ensure you’re up to date with the minimum wage laws and your business is protected from any legal issues.
Minimum Wage Information For Employers
It’s important for employers to be informed on when the minimum wage will be raised in order to accommodate payroll procedures accordingly. There will be two minimum wage increases in 2021. The first wage increase was on January 1 — from $8.56 per hour to $8.65 per hour — and the second will be on September 30. The rise of the minimum wage on September 30th, 2021, will increase Florida’s minimum wage rate to $10 per hour ($6.98 per hour for tipped employees). The minimum wage will gradually increase each September as follows:
- $10.00 on September 30, 2021
- $11.00 on September 30, 2022
- $12.00 on September 30, 2023
- $13.00 on September 30, 2024
- $14.00 on September 30, 2025
- $15.00 on September 30, 2026
Employers should start preparing for these raises as soon as possible to prevent any complications in the future. Violating Florida minimum wage laws can lead to a civil lawsuit by an employee, which could result in you paying double the amount of wages owed as well as attorney’s fees and costs.
Take Immediate Action
In order to prepare your business and employees for these minimum wage changes, it’s essential to address how compensation will be adjusted as soon as possible. Assess the effects that increasing minimum wage will have on overtime payment, exempt employees’ compensation, and salary compression. Additionally, you should begin to train your human resource team on the wage increases and how to deal with employees’ questions regarding these changes. Dealing with these issues ahead of time will allow you to be prepared for any challenges that may arise and handle them as easily as possible.
Possible Legal Issues
Every employee has the right to receive his or her increased minimum wage. Employers may not retaliate against employees exercising this right as it could end in serious legal issues. If an employer violates any wage laws or refuses to pay at least the minimum wage, the following can occur:
- Employees can file a complaint about their employers alleged noncompliance with updated minimum wage rates.
- HMRC (HM Revenue and Customs) can send a notice of arrears and issue financial penalties.
- HMRC can also take an employer to court which can end in a hefty fine on top of attorney fees and costs.
- Employers may be named publicly and banned from directing a company for up to 15 years.
Although some of these situations are extreme, any employer who violates minimum wage laws is susceptible to such legal issues. This could be detrimental to your name and company, so always abide by minimum wage laws and seek professional legal advice if needed.
Florida allows employers to pay their tipped employees a minimum wage rate of at least $5.63 per hour. A tipped employee is an employee who engages in an occupation where he or she regularly gets paid tips excessing $30 a month. It’s important to keep in mind that employers are required to subsidize a tipped employee’s minimum wage rate if the employee’s tips and gratuities are insufficient to allow the employee to receive wages that are at least equal to the state’s minimum wage rate.
Florida’s new minimum wage laws protect all employees. Although minimum wage for tipped employees will continue to be lower than a regular employee, their minimum wage rates will also increase throughout the years. Additionally, the same “tip credit” system will remain in place with the new minimum wage. If the tips they earn don’t add up to at least the minimum wage, employers must make up the difference.
Employers are also required to display the 2021 minimum wage poster in a location where employees can easily see it. The Florida 2021 minimum wage poster is available in English, Spanish, and Creole. You can find the poster at the link above.
Compliance Will Be More Important Than Ever
Any employer understands how expensive and tedious wage and hour lawsuits can be. They often cost more than the wages allegedly owed and take up valuable time from an employer running a business. With the new minimum wage laws, record keeping will be one of the strongest protections against wage and hour lawsuits. Implementing detailed and consistent records of employee’s hours will be critical to protecting your business in the case of a claim. Consider keeping accurate records of all hours worked, payments made, and job duties. It may also be beneficial to audit your payroll systems to ensure you have all the information necessary.
Florida Minimum Wage Compliance Strategy
Insurance regulations, employment laws, and minimum wage laws are ever-changing. That’s why it’s imperative that you have a trusted insurance partner to keep you well informed and in compliance to prevent any legal issues or loss of money within your company. At Alltrust, we have the knowledge, support, and resources to help you comply with all laws and regulations. With statistics showing that compliance solutions are becoming the most vital resource, Alltrust has developed one of the single-most comprehensive compliance programs available in the market. Contact us today to learn more about minimum wage laws in Florida and how to comply in order to keep your business protected.
This blog post is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.