New Florida Laws in 2019: Minimum Wage Increase
I don’t even have New Year’s Eve plans yet, but I’ve already been thinking about some of the new laws that take effect on New Year’s Day 2019—maybe that’s why I don’t have NYE plans. My New Year’s resolution is to quit reading so many law articles and blogs and to have a life! (We’ll see how that goes. Anyways, I digress.)
This is the first in a short series of blog posts that will outline and analyze new laws and regulations that Florida business owners need to be aware of in 2019. Upcoming posts include: Business Rent Tax Decrease and Mandatory Condominium Association Websites. If you have any questions, feel free to reach out to me.
Florida’s Minimum Wage Increasing to $8.46 – Effective January 1, 2019
As of January 2019, Florida’s current minimum wage of $8.25 per hour will be raised by 2.5 percent to $8.46. Florida’s minimum wage rates are not set by a new law each year, that would be difficult to accomplish. Instead, the Florida Minimum Wage Act (FL Stat. 448.110) gives authority to the Florida Department of Economic Opportunity (DEO) to set the new rates each year based on the Federal Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for the South Region.
This new rate will rank Florida as 27th in the U.S. for state minimum wage rates. This might seem low, and that can certainly be argued. However, 23 of the 26 states that rank above Florida have state income taxes—Florida does not. This means, the minimum wage in those states is taxed on the Federal and State level.
Additionally, the Federal minimum wage, set by the U.S. Department of Labor’s Wage & Hour Division, has been at $7.25 since 2009. Companies must comply with the higher of the two rates for employees who work hours while in Florida. Conveniently, Florida’s definitions of employer, employee, and wage are the same as those under the Federal Fair Labor Standards Act (FLSA).
What About Tipped Employees?
All of the above applies to hourly minimum wage employees. Employers of tipped employees, who meet the requirements for the tip credit under the FLSA, may credit towards satisfaction of the minimum wage tips up to the amount of the allowable FLSA tip credit. Currently, the maximum tip credit under the FLSA is $5.12 per hour. It’s important to know that in Florida, an employer must pay tipped employees a direct wage per hour.
As of January 1, 2019, the direct wage for tipped employees in Florida is calculated as:
- Equal to the Florida minimum wage of $8.46,
- Less Florida’s tip credit of $3.02 (the rate since 2003),
- Equaling a direct hourly wage of $5.44 for hours worked in Florida by tipped employees.
This post does not address tip pooling, but that can add an additional layer of nuance and analysis depending on your business.
What does this mean for your business?
Employers should consult with their business attorney, accountant, and payroll processor to make sure they are prepared for the various impacts that the new minimum wage change will have on their business. Some of these considerations include financial forecasting, mandatory posters and disclosures to employees, updating employee handbooks, reviewing employee agreements, accounting procedures, etc. The beginning of the year is always a good time to do an audit of your employment & HR procedures and documentation.
Contact me, Chris Cervellera, if you would like to schedule a consultation to learn how I can help you with your small business law and advisory needs.
- Florida Department of Economic Opportunity – Minimum Wage Page (Posters, Notices and other Resources)
- Florida Department of Economic Opportunity (DOE) – Minimum Wage Increase Notice 2018 (for 2019)
- U.S. Department of Labor’s Wage and Hour Division – Minimum Wage Page
- U.S. Department of Labor’s Wage and Hour Division – Tipped Employee Page
- U.S. Department of Labor’s Wage and Hour Division – Tipped Employee Fact Sheet
Note: This informational article should not be construed or interpreted as legal advice nor the formation of an attorney-client relationship. Always consult an attorney to learn how the law applies to your unique situation.