• Impact of Adjustment to Florida Minimum Wage on Employers Who Take "Tip Credit" for Tipped Employees
  • January 5, 2006
  • Law Firm: Ford & Harrison LLP - Atlanta Office
  • The upcoming CPI adjustment (effective January 1, 2006) to the Florida minimum wage will require employers who take a tip credit against the minimum wage to pay tipped employees $3.38 per hour.

    The federal Fair Labor Standards Act permits employers to take a credit against the minimum wage requirement for the value of tips received by employees who regularly receive more than thirty dollars per month in tips. A tip is defined as a gratuity or gift paid by a customer to the employee.

    The tip credit is currently set at $3.02 per hour. Thus, employers who take this credit must pay employees an additional amount to bring their wages up to the minimum wage. The additional amount that must be paid to employees entitled to the federal minimum wage of $5.15 per hour is $2.13 per hour (technically $2.125 per hour, but the Department of Labor appears to take the position that this amount must be rounded up to $2.13 per hour, since that is the number they consistently use on their web site). Employers covered by the Florida Minimum Wage Act must pay tipped employees $3.13 per hour to bring their pay up to the current Florida minimum wage of $6.15 per hour.

    Effective January 1, 2006, the Florida minimum wage will increase to $6.40 per hour. Accordingly, the amount tipped employees receive must be increased to $3.38 per hour to ensure they are paid at least the minimum wage required by Florida law.