Welcome back to our series on Wage & Hour issues. Last time, we discussed overtime pay and, in this installment, we’ll review what you need to keep in mind about minimum wage. As you can probably figure out without our help LOL, minimum wage is the minimum hourly pay an employer must pay to covered, nonexempt workers. Remember that in the last blog, we mentioned that the criteria for categorizing an employee as exempt have undergone vast changes and it would behoove you to refresh yourself with the amended regulations.
A federal minimum wage provision is contained in the Fair Labor Standards Act (FLSA), and it is $7.25 per hour since its effective date on July 24, 2009. However, many states also have minimum wage laws. In fact, on November 3, 2020, Florida voters approved Amendment 2, which amends Florida’s constitution to gradually increase our state’s minimum wage to $15.00 an hour by the year 2026. This is occurring in $1.00 increments on September 30th of every year, and in 2021 rose to $10.00 per hour. The increases are as follows:
- $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
Not only does this change affect the pay for any entry level positions, which must be regularly reviewed to assure you keep up with mandatory increases, but it prompts employers to look at wages across the board relative to the minimum wage increase. For now, your wages may be in line with the market and unaffected by the minimum wage increase to $10/hour for 2021. But consider that you hired a medical assistant with one year of experience for your primary care practice at around $14.50 per hour. Assuming he is a good employee and receives high marks on performance evaluations each year, what we now consider a generous pay increase (e.g., 3, 5 or 7%) may soon undervalue his experience relative to newcomers.
In addition, for many of our home health clients, homemakers/companions are at the low end of the skill scale and generally earn the minimum or close to it. Note that you will be forced to give these workers a $1.00 raise each year until 2026. We advise that you assure your job expectations are clear, you fairly and consistently measure performance, and coach aggressively to hone the skills you need for your clients. Few things can sink a service business faster than rewarding mediocre or poor workers. Join us for the next installment of this Wage & Hour Series when we’ll discuss the Family & Medical Leave Act (FMLA).