On February 16th the Commerce and Tourism Committee of the Florida Senate reported favorably on a bill that would allow Florida employers to fundamentally alter the way that tipped employees are paid. Senate Bill 2106 is now before the Regulated Industries Committee. The text of the bill is available here.
Currently, the Florida minimum wage for employees is $7.67 per hour. However, Florida law allows employers of tipped employees to take what is called a “tip credit” against wages of up to $3.02. Employers who take the tip credit must pay tipped employees a direct wage of $4.65, which is equal to the minimum wage ($7.67) minus the applicable tip credit ($3.02).
The Federal Fair Labor Standards Act (FLSA) requires employers of tipped employees to pay a direct wage, which is equal to the federal minimum wage ($7.25) minus the federal tip credit ($5.12), or a direct hourly wage of $2.13 per hour.
Under Senate Bill 2106, Florida employers of tipped employees would have the option of not paying a direct hourly wage of $4.65. Rather, employers could elect to pay a guaranteed wage for such tipped employees, equal to at least 130 percent of the state minimum wage, rounded up to the next cent (or $9.98 an hour).
If the employer makes the election, the employer would be deemed to have met the requirement to pay the Florida minimum wage, but would still be required to meet the requirements of the FLSA. Thus, the employer would still have to pay a direct hourly wage of $2.13 per hour. The employer would then be required to make up any failure of the combination of the $2.13 direct hourly wage and actual tips to equal the guaranteed compensation of at least $9.98 per hour.
If the employer failed to pay the guaranteed wage in the notice or engaged in retaliation against an employee, the employer would be liable for the unpaid wage, and an equal amount as liquidated damages and fees and costs.
Employers of tipped employees should stay abreast of developments in this area.
