How Your Small Business Can Prepare for Florida’s Minimum Wage Increase
In recent years, we’ve seen a reopening of the debate over minimum wage. Advocates are currently pushing for an increase to $15.00 per hour by 2026, with the door open to possible increases in the years after that. If you’re a worker, this is good news. A slight bump in the Florida minimum wage can increase the pay you receive, compensating for rising costs of living and other expenses. However, if you’re a small business owner, this wage increase can lead to tough decisions. Unless you’re a corporate giant, it can be tough to maintain your current roster of employees if you have to pay them more.
In this post, we’ll help you to prepare for the coming changes in the Florida minimum wage. We’ll also provide suggestions about the best ways to navigate the road ahead.
What is the Current Florida Minimum Wage?
As of January 1, 2021, Florida’s minimum wage has increased from $8.56 per hour to $8.65 per hour. Tipped employees have seen a recent increase in their wages, rising from $5.54 per hour to $5.63 per hour.
According to federal law and in some states, like Florida, employers may pay tipped workers less than the mandated minimum wage. This is called a “tip credit” as employees earn enough in tips to make up the difference. The “credit” is the amount the employer doesn’t have to pay. So for employers, the applicable state or federal minimum wage minus the tip credit is the least amount the employer pays tipped employees per hour. If an employee doesn’t make enough tips during their shifts to earn the hourly minimum wage, the employer has to pay the difference.
Are There Plans to Change the Florida Minimum Wage After 2021?
These changes will not stop in 2021. In November of 2020, Florida residents voted to raise the Florida minimum wage to $15.00 by 2026. The minimum wage increases will take place in a phased approach, raising the minimum wage each year on September 30. The proposed schedule will run as follows:
- $10.00/hour on September 30, 2021
- $11.00/hour on September 30, 2022
- $12.00/hour on September 30, 2023
- $13.00/hour on September 30, 2024
- $14.00/hour on September 30, 2025
- $15.00/hour on September 30, 2026
While there are no specific plans after 2026, the minimum wage increase may increase based on changes to the federal Consumer Price Index for Urban Wage Earners and Clerical Workers in the South Region.
How Should Small Business Owners Prepare for Florida Minimum Wage and Paid Leave Increases?
If you’re a business owner, don’t panic. At Xendoo, we understand the unique challenges facing today’s small business owners.
Here are some suggestions on ways that your business can prepare for changes in the Florida minimum wage:
Audit Your Expenses
How much are you already spending on overhead, supplies, and operating costs? You may be able to cut a few corners with certain expenses or by eliminating wasted spending. The money you save can be channeled into your human resources budget.
Determine Your Budget
Using these increased wage figures, calculate your new operating budget. Forecasting your operating expenses will let you know what you’re dealing with and provide an idea of what your income needs to be to maintain your profit margin.
Update Your Tech Stack
A tech stack refers to the digital tools you need to run your business. An update can help you to automate your social media presence, streamline scheduling, or integrate automated forms into your company’s website. These improvements optimize your business without the need for additional personnel or work hours.
Check Your Employee Classifications
How many full-time employees do you need? How many part-time employees do you need? Of course, you don’t need to start considering downsizing, but at the same time, it can be helpful to consider what your future needs may be.
You may find that in the future, you can get by with fewer staff members. Perhaps you can rely on part-time staff to fill roles that you currently staff with full-time employees.
Gradually Increase Prices
Your new operating costs will probably push you to increase your prices to maintain your profit margin. However, raising prices slowly will give your loyal customers time to adjust while still ensuring you get the revenue you need.
Outsource Your Back Office
Are you still handling your own bookkeeping and accounting? Paying an employee to handle these specialized tasks may put a strain on your operating budget. Instead, outsource these tasks to a company like Xendoo. We can keep your company up and running without allocating your employees to do the job.
Contact Xendoo Today
The increase in the Florida minimum wage might mean big changes for your business. At Xendoo, we can help you stay ahead of the curve, adapt to these changes, and remain healthy and profitable.
We understand the challenges that Florida small businesses face. We can provide small business owners with Florida bookkeeping services that ensure accuracy and efficiency so that you don’t have to allocate precious resources to maintaining the books.
We can also help you with your Florida tax preparation, helping you to navigate the laws and changes that are likely to come your way in the immediate future.