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UPDATE: Florida’s Minimum Wage is Going up on June 1, 2011

by Martin Salcedo, Esq. - The Human Equation on 5/10/2011
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Florida employers must prepare for an increase in the minimum wage. On May 3, 2011, Florida’s Agency for Workforce Innovation announced that effective June 1, 2011, Florida’s minimum wage will be $7.31 per hour, which is six cents more than the current federal minimum wage of $7.25 per hour. This increase is not only unexpected, it is unusual.

Florida’s minimum wage is the result of a 2004 voter-approved amendment to the Florida Constitution, and it applies to all Florida employees who are covered by the federal minimum wage. Under Florida law, the Agency for Workforce Innovation (AWI) is required to calculate and publish an adjusted minimum wage rate by October 15th of each year. The annual calculation is based on the percentage change in the federal Consumer Price Index for urban wage earners and clerical workers in the South Region for the preceding 12-month period.

Ordinarily, an increase to the minimum wage resulting from the AWI’s annual calculation will go into effect on January 1st of the following year. In 2010, the AWI announced that the 2011 minimum wage in Florida will remain unchanged at the current federal minimum wage of $7.25 per hour. Consequently, Florida employers were not required to update their minimum wages for the upcoming year.

So what is the reason for the June 1, 2011 increase? It turns out that a lawsuit filed by several aggrieved workers and worker advocacy centers prompted the AWI’s mid-year minimum wage increase.

According to the lawsuit filed in Leon County, Florida, the AWI lowered the state minimum wage in 2010, from $7.21 per hour to $7.06 per hour, because deflation caused the cost of living to decline. Unfortunately, the Florida Supreme Court previously held that the constitutional amendment that created the minimum wage “clearly does not provide for decreases in the minimum in times of deflation.” Therefore, the AWI did not have the legal authority to decrease the minimum wage. Since federal law requires employers to pay the higher of the federal or state minimum wage, the AWI’s 2010 minimum wage decrease did not affect Florida employers.

However, when the AWI calculated the 2011 rate, it used the improperly decreased 2010 rate as the base rate. According to the lawsuit, had the AWI started with the correct base rate of $7.16 per hour, which was the rate before the AWI improperly lowered it due to deflation, then the minimum wage for 2011 would have been $7.31 per hour.

The judge agreed and the AWI responded by raising the minimum hourly wage in Florida to $7.31, which is effective June 1, 2011.

Pursuant to Florida law, employers must pay their employees a wage of not less than the amount of the hourly state minimum wage for all hours worked in Florida. The definitions of "employer," "employee," and "wage" for state purposes are the same as those established under the federal Fair Labor Standards Act (FLSA).

For "tipped employees" meeting eligibility requirements for the tip credit under the FLSA, employers may count tips actually received as wages under the FLSA, but the employer must pay "tipped employees" a direct wage in an amount equal to the minimum wage of $7.31 minus $3.02 (which, as required by Florida's Constitution, is the 2003 tip credit existing under the FLSA), or a direct hourly wage of $4.29 as of June 1, 2011.

Employees who are not paid the minimum wage may bring a civil action in a court of competent jurisdiction against their employer or any person violating Florida's minimum wage law. The state attorney general may also bring an enforcement action to enforce the minimum wage. The FLSA rules also apply to failure to pay minimum wage.

Employers who must pay their employees the Florida minimum wage must post a minimum wage notice in a conspicuous and accessible place in each establishment where these employees work. Florida’s poster is in addition to the federal poster, so two separate minimum wage notices must be posted. You can get the revised poster reflecting the upcoming minimum wage increase here.

Since the consequences for failing to pay the correct minimum hourly wage can be severe, employers must be diligent in ensuring that their minimum wage employees are compensated properly. To minimize the risks associated with failing to operate their businesses in accordance with both state and federal law, organizations need to train their managers on the FLSA and other employment laws.

If you have any questions, or would like more information, please contact us.

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