I'm Getting a Raise!

9/7/2021 - By Constance O'Donnell

On September 30, 2021, the minimum wage for Florida employers will increase to $10 per hour for non-tipped employees.

In the November 2020 election, Florida voters approved to gradually raise the state's minimum wage from $8.56 in December 2020 to $15 per hour in September 2026. On January 1, 2021, the minimum wage increased from $8.58 to $8.65 for non-tipped personnel. After the upcoming increase in September, the employee will see an increase of over 14 percent in just a few months.

For many years, the Florida minimum wage has been higher than the federal minimum wage, which is $7.25 per hour. Each state chooses their minimum wage level, but many acquiesce to the federal, including our neighbors Alabama, Georgia and Mississippi.

While employees are celebrating the significant raise, small employers are struggling. Over 99% of employers in the U.S. are small businesses. Higher labor costs are forcing many small businesses to raise prices, reduce hours, reduce staff and invest in automation just to break even.

Whereas in December of 2020, Florida employers could pay an entry-level employee $8.58 and the shift manager $10 per hour, they are now forced to increase wages across the board. Consumers can expect to see higher costs for all goods and services.

A higher minimum wage can raise the standard of living for about 17 million people, according to a 2019 report by the Congressional Budget Office (CBO). But if the increase comes at the cost of reduced hours, their employer going out of business, or increased costs and inflation, are the benefits of a higher minimum wage really that significant?

There are no easy answers, and the debate continues in Congress, in board rooms and at kitchen tables across the U.S.

Questions?

Reach out to our Tax Department and they can help answer any questions about the Florida minimum wage change.

About the Author | Connie O’Donnell

Connie is a senior in the Tax & Accounting Services Department of Saltmarsh, Cleaveland & Gund. Prior to joining Saltmarsh in December 2014, Connie worked with a local CPA and consulting firm performing a variety of tax and accounting functions for business and personal clients, including preparation of corporate, non-profit and individual tax returns. She began her career in public accounting in 1993.