Florida Voters Pass Minimum Wage Amendment

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Florida voters on November 3, 2020 passed Amendment 2, which will, over a period of years, increase Florida’s minimum wage to $15.00 per hour.

Florida's minimum wage was already set to increase from $8.56 per hour to $8.65 per hour effective January 1, 2021, and that increase will still take place. With the new change, there will be annual increases thereafter, first to $10.00 per hour, and then by $1.00 each year until the rate reaches $15.00. From that point, further increases may be made, based on changes to the consumer price index for urban wage earners and clerical workers (“CPI”).

The exact timing of the increases could be subject to some debate, given the specific wording of this change. Amendment 2 revised Article X, Section 24 of the Florida Constitution (“Section 24”). Prior to this change, Section 24 provided that the Agency for Workforce Innovation (“AWI”) would calculate an adjustment to the minimum wage each September 30th, and the “rate calculated” would take effect on the following January 1st. The new language states that “[e]ffective September 30, 2021,” the minimum wage will increase to $10.00 per hour, and the rate will “increase each September 30th thereafter by $1.00,” until it reaches $15.00 per hour on September 30th, 2026. After that, the AWI will recommence the annual adjustment process as it had existed before the new changes.

Room for debate as to the timing of the increases arises because while Section 24 now states that the annual $1.00 increases are “effective” each September 30th, the prior language about changes “tak[ing] effect” the following January 1st has been retained. A careful reading suggests that the increase to $10.00 and the annual $1.00 increases will take effect on each September 30th, while the later changes will take effect on each January 1st. This is because Section 24, as revised, refers to “calculated” rates taking effect on January 1st, and the $1.00 increases are not “calculated,” but rather are predetermined. Accordingly, the minimum wage in Florida will increase to $8.65 on January 1, 2021, to $10.00 on September 30, 2021, to $11.00 on September 30, 2022, to $12.00 on September 30, 2023, to $13.00 on September 30, 2024, to $14.00 on September 30, 2025, and to $15.00 on September 30, 2026. Thereafter, the minimum wage will be adjusted based on the CPI. Notably, Section 24 provides for increases based on changes in the CPI, but there is no provision for reductions based on changes in the CPI.

Florida’s minimum wage law applies to all employees in the state of Florida who are covered by the federal minimum wage law. For "tipped employees" who meet eligibility requirements for the tip credit under the federal Fair Labor Standards Act (“FLSA”), employers may take a “tip credit” of up to $3.02 per hour, for tips actually received by the employee, but must still pay employees a direct wage. Applying this formula, the minimum direct hourly wage for tipped employees in Florida will be $5.63 beginning on January 1, 2021, and will increase to $6.98 beginning September 30, 2021, etc.

Both Florida’s minimum wage rate and the direct hourly wage rate for tipped employees are higher than the federal rates, so Florida employees must be paid the higher Florida rates.

Employers who must pay their employees the Florida minimum wage must post a notice of the state minimum wage requirement (in addition to posting a notice as required by the FLSA). The notice is available at http://www.floridajobs.org/business-growth-and-partnerships/for-employers/display-posters-and-required-notices.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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