Tag: FLSA

Florida minimum wage increasing by $1 on September 30th

By Anita Byer, Setnor Byer Insurance & Risk

In case you forgot, Florida’s minimum wage is increasing by $1 at the end of the month. On September 30, 2022, Florida’s minimum wage will increase to $11 per hour. The minimum wage for tipped employees, which must be paid in addition to tips, will increase to $7.98 per hour. This increase is required by the $15 Minimum Wage Ballot Initiative (Amendment 2) approved by Florida voters in November 2020.

Amendment 2 increases Florida’s minimum wage incrementally over a period of years until it reaches $15 per hour in 2026. The first (and largest) minimum wage increase happened last year. Future increases are set to occur annually on September 30th per the following schedule.

2022                $11.00

2023                $12.00

2024                $13.00

2025                $14.00

2026                $15.00

Annual adjustments for inflation, which have taken place since 2005, are scheduled to resume September 2027. Florida’s Minimum Wage Act is interpreted and applied much like the federal Fair Labor Standards Act. Employers must pay no less than the federal minimum wage or their state’s minimum wage, whichever is higher. Florida’s 2022-2023 minimum hourly wage remains higher than the current federal minimum hourly wage of $7.25.

Florida’s constitutional minimum wage requirements remain otherwise unchanged by Amendment 2. Employers, for example, are still prohibited from discriminating or retaliating against employees for exercising their constitutional minimum wage rights. Employers can still be sued by employees and Florida’s Attorney General for violating these rights. These lawsuits are still expensive.

Covered employers are also still required to post the required minimum wage notice in the workplace. Per Florida law:

  • the notice must be posted prominently in a conspicuous and accessible place in each establishment where minimum wage employees are employed;
  • the poster must be at least 8.5 inches by 11 inches and in a format easily seen by employees;
  • the text in the poster must be of a conspicuous size;
  • the text in the first line must be larger than the text of any other line; and
  • the text of the first sentence must be in bold type and larger than the text in the remaining lines.

To reduce the likelihood of costly mistakes, employers should provide wage and hour training to managers and supervisors. Employers should also carry Employment Practices Liability Insurance with limited coverage for wage and hour claims. Contact us to learn more about protecting your business with Employment Practices Liability Insurance.

Florida’s New $10 Minimum Wage Poster

By Anita Byer, Setnor Byer Insurance & Risk

Florida’s new $10 minimum wage poster is now available! Just in time too, because the largest minimum wage increase in Florida history is here. On September 30, 2021, Florida’s minimum wage will increase to $10 per hour. But that’s not the only thing that’s changing. In addition to making any necessary payroll adjustments, employers must also update their Florida minimum wage posters to reflect the new minimum wage.

Download the Florida Department of Economic Opportunity’s $10 Minimum Wage Poster.

Florida law requires employers to notify employees of their right to be paid no less than the minimum hourly wage and what they can do if their employer fails to do so. Employers can satisfy this notice requirement by posting the Department of Economic Opportunity’s “Notice to Employees – Minimum Wage in Florida.” But this notice can’t just be posted. It must be posted correctly.

  • The poster must be posted prominently in a conspicuous and accessible place in each establishment where minimum wage employees are employed.
  • The poster must be at least 8.5 inches by 11 inches and in a format easily seen by employees.
  • The text in the poster must be of a conspicuous size.
  • The text in the first line must be larger than the text of any other line.
  • The text of the first sentence must be in bold type and larger than the text in the remaining lines.

Remember that $10 per hour is just the first minimum wage increase required by the constitutional amendment approved by Florida voters. It will increase by $1 annually until it reaches $15 per hour on September 30, 2026. The annual adjustments for inflation are scheduled to resume in 2027. Employers must update their minimum wage posters annually to remain compliant with Florida law.

To reduce the likelihood of costly mistakes, employers should provide wage and hour training to managers and supervisors. Employers should also carry Employment Practices Liability Insurance with limited coverage for wage and hour claims. Contact us to learn more about protecting your business with Employment Practices Liability Insurance.

Florida’s Minimum Wage Increasing to $10 Per Hour on September 30

By Anita Byer, Setnor Byer Insurance & Risk

The largest minimum wage increase in Florida history is just weeks away! On September 30th, Florida’s minimum wage will increase to $10 per hour. That’s $1.35 more per hour than the current minimum wage and $1.44 more than last year’s minimum wage. A quick peak at the calendar confirms that employers have plenty of very little time left to prepare for this historic wage increase.

The upcoming increase is required by the $15 Minimum Wage Ballot Initiative (Amendment 2), which was approved by Florida voters in November 2020. Amendment 2 increases Florida’s minimum wage incrementally over a period of years until it reaches $15 per hour. The first (and largest) increase will occur September 30, 2021. It will then increase annually on September 30th per the following schedule.

2021                       $10.00

2022                       $11.00

2023                       $12.00

2024                       $13.00

2025                       $14.00

2026                       $15.00

2027                       Annual adjustments for inflation resume.

As of September 30, 2021, a minimum wage employee working full-time will need to be paid an additional $54 per week. Depending on the workforce make-up, the resulting increase in payroll expense may be minimal for some and substantial for others. Nevertheless, all employers must plan and prepare beforehand to avoid unintentional, unnecessary and costly violations. Employers should also look beyond this year’s record-breaking increase when budgeting for payroll. There will be five more increases under Amendment 2, each of which is large enough to tie the current record for largest single increase in Florida history.

To reduce the likelihood of costly mistakes, employers should provide wage and hour training to managers and supervisors. Employers should also carry Employment Practices Liability Insurance with limited coverage for wage and hour claims. Contact us to learn more about protecting your business with Employment Practices Liability Insurance.

Largest Minimum Wage Increase in Florida History is Less than Six Months Away

When Florida enacted its own minimum wage in 2005, the minimum hourly wage went up $1. Despite going up every year since, this is still the largest single increase in Florida history…for now. On September 30, 2021, Florida’s minimum wage will go from $8.65 to $10, an increase of $1.35 per hour. In other words, Florida employers have less than six months to prepare for the largest minimum wage increase ever.

Depending on workforce make-up, the resulting increase in payroll expense may be minimal for some and substantial for others.

The upcoming increase is required by the $15 Minimum Wage Ballot Initiative (Amendment 2), which was approved by Florida voters in November 2020. Amendment 2 increases Florida’s minimum wage incrementally over a period of years until it reaches $15 per hour. The first (and largest) increase will occur September 30, 2021. It will then increase annually on September 30th per the following schedule.

  • 2021       $10.00
  • 2022        $11.00
  • 2023        $12.00
  • 2024        $13.00
  • 2025        $14.00
  • 2026        $15.00
  • 2027        Annual adjustments for inflation resume.

As of September 30, 2021, a minimum wage employee working full-time will need to be paid an additional $54 per week. Depending on the workforce make-up, the resulting increase in payroll expense may be minimal for some and substantial for others. Employers should start planning now to avoid unintentional, unnecessary and costly wage and hour violations. These plans should extend beyond this year’s record-breaking increase. There will be five more increases under Amendment 2, each of which is large enough to tie the current record for largest single increase in Florida history.

To reduce the likelihood of costly mistakes, employers should provide wage and hour training to managers and supervisors. Employers should also carry Employment Practices Liability Insurance with limited coverage for wage and hour claims. Contact us to learn more about protecting your business with Employment Practices Liability Insurance.

Employment Law Landscape Expected to Change Under Biden Administration

Setnor Byer Insurance & Risk

Shortly after delivering his inaugural address, President Biden began taking steps to push his policy agenda forward. This is particularly true in the employment law context. Step 1, as expected, was to stop any pending regulatory activity initiated under the Trump administration. This president’s Chief of Staff issued a memorandum ordering an immediate regulatory freeze of all non-emergency regulatory activity pending review by the new administration.

The memorandum, which is nearly identical to the one issued on President Trump’s first day in office, specifically instructed the heads of all executive departments and agencies, including the Department of Labor, to:

  • not propose or issue any rule in any manner until a department or agency head appointed or designated by President Biden reviews and approves the rule;
  • immediately withdraw any rules that have not already been published in the Federal Register; and
  • consider postponing by 60 days the effective date of any rules issued in any manner, including those published in the Federal Register, which have yet to take effect for the purpose of reviewing any relevant questions of fact, law and policy.

The scope of this regulatory freeze is quite broad in that it applies to any:

  • regulatory actions;
  • guidance documents;
  • substantive actions by an agency, including notices of inquiry, advance notices of proposed rulemaking and notices of proposed rulemaking;
  • agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory or technical issue or an interpretation of a statutory or regulatory issue.

Its effects are already being felt. The Department of Labor’s Final Rule for determining independent contractor status under the Fair Labor Standards Act, which was set to take effect March 8, 2021, is expected to be among the more significant casualties of the regulatory freeze. Three FLSA opinion letters issued by the Wage & Hour Division on President Trump’s last full day in office have already been withdrawn by the Biden administration. Employers should expect more of the same in the coming weeks and months. Unfortunately, the uncertainty that always accompanies regulatory changes significantly increase the risk of employment-related claims and lawsuits. The confusion caused by uncertainty creates an environment where mistakes are inevitable. As a result, employers will likely need Employment Practices Liability Insurance to protect against various employment-related claims. Please contact us to learn more about EPLI coverage.

FLSA Update: Department of Labor Revises Joint Employment Regulations under the Fair Labor Standards Act

The Fair Labor Standards Act’s regulations are changing again. These changes involve joint employment under the FLSA, which is important because joint employers are individually and jointly responsible for FLSA compliance and legally liable for violations. According to the Department of Labor, the revised regulations will reduce uncertainty over joint employer status and reduce litigation.

Assume Susan, a non-exempt employee, worked 35 hours for Acme and 35 hours for Globex in a single workweek. If Acme and Globex are deemed joint employers, each would be individually and jointly responsible for the 30 hours of overtime compensation that Susan is due. Otherwise, Susan could sue Acme, Globex or both for violating the FLSA.

The revised regulations continue to recognize two potential scenarios in which an employee may have joint employers. The first involves an employee who performs work for Employer A that simultaneously benefits another individual or entity (Employer B). The DOL adopted a four-factor balancing test to determine whether Employer B exercises sufficient direct or indirect controls over the employee to qualify as a joint employer. The four factors are whether Employer B:

  • hires or fires the employee;
  • supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
  • determines the employee’s rate and method of payment; and
  • maintains the employee’s employment records.

Employer B must actually exercise direct or indirect control over the employee. Indirect control is exercised if Employer B gives mandatory directions to Employer A that directly controls the employee. The appropriate weight to give each factor will vary depending on the circumstances. Additional factors may need to be considered in some cases, but some factors are not relevant, such as whether a potential joint employer is franchisor or whether there is a contract between potential joint employers.

No substantive changes were made for determining joint employment status in the second scenario, which involves employees who work one set of hours for one employer and a separate set of hours for another. If the employers are acting independently with respect to an employee’s employment, they are not joint employers. If they are sufficiently associated with respect to an employee’s employment, they are joint employers and must aggregate all hours worked to determine FLSA compliance.

The revised regulations, which are effective March 16, 2020, include examples for determining joint employment in various factual circumstances. Employers should pay attention to circumstances that may create a joint employment relationship and should consult their attorney to avoid costly FLSA violations. Employers should also consider Employment Practices Liability Insurance to protect against various employment-related claims. Please contact us to learn more about EPLI coverage.

FLSA Update: New Regulations Clarify Wage & Hour Calculation for Perks and Benefits

New Fair Labor Standards Act regulations should make it easier for employers to offer perks and benefits to employees. The Department of Labor updated the regulations to clarify the distinction between payments that must be included in an employee’s “regular rate” and payments that may be excluded. Since the “regular rate” is used to calculate a non-exempt employee’s overtime rate, this relatively subtle distinction can have substantial implications.

All remuneration must generally be included in an employee’s “regular rate,” unless it is specifically excluded under the FLSA. If money given as a birthday gift, for example, had to be included in an employee’s regular rate, that employee’s overtime rate for the week would be higher than normal. Fortunately, sums paid as gifts on special occasions can be excluded from the “regular rate.” The ability to exclude certain payments from an employee’s regular rate, makes it easier for employers to provide various perks and benefits to their employees.

The new regulations, which became effective January 15, 2020, clarify various perks and benefits that may be excluded from an employee’s “regular rate,” such as:

  • the cost of providing certain parking benefits, wellness programs, gym access, fitness classes, certain tuition benefits and adoption assistance;
  • payments for unused paid leave, including paid sick leave or paid time off;
  • payments of certain penalties required under state and local scheduling laws;
  • reimbursed expenses (cellphone plans, credentialing exam fees, membership dues, travel), even if not incurred “solely” for the employer’s benefit;
  • the cost of office coffee and snacks to employees as gifts;
  • discretionary bonuses (clarifying that labels do not determine the discretionary nature of a bonus); and
  • contributions to benefit plans for accident, unemployment, legal services or other events that could cause future financial hardship or expense.

Calculating an employee’s regular rate under the FLSA is a highly nuanced, detailed and fact-specific process. The consequences for improper wage and hour calculations can be severe. Employers should take advantage of the FLSA’s “regular rate” exclusions, but should do so cautiously, preferably with the assistance of legal counsel. Fortunately, insurance is available to protect against various employment-related liabilities in case something goes wrong. Please contact us to learn more about employment practices liability insurance.

FLSA Update: New White-Collar Exemption Rules Permit “Catch-Up” Payment to Satisfy Minimum Salary Requirement

The Fair Labor Standards Act’s new white-collar exemption regulations did more than increase the minimum salary requirement for exempt executive, administrative and professional employees from $455 to $684 per week. They also let employers use nondiscretionary bonuses, incentives and commissions to satisfy up to 10 percent of the minimum salary requirement.

In other words, if an exempt employee’s annual salary, including nondiscretionary bonuses, incentives and commissions, is less than $35,568 at the end of the year, employers may make one final payment of up to $3,556.80 to satisfy the minimum salary requirement for that employee. These “catch-up” payments are subject to the following rules.

  • Employers may only use nondiscretionary bonuses, incentives and commissions that are paid annually or more frequently.
  • Employers may utilize any 52-week period as the year (calendar year, fiscal year, hire-date anniversary, etc.).
  • If an employer does not identify a specific 52-week period in advance, the calendar year will apply.
  • The “catch-up” payment must be made no later than the next pay period after the end of the year.
  • If the “catch-up” payment is made after the end of the 52-week period, it may count only toward the prior year’s salary amount and not toward the salary amount in the year it was paid.

According to the Department of Labor, this change was made in recognition of evolving compensation practices in a growing number of workplaces. “Catch-up” payments are not required, but many employers are expected to take advantage of the new rule. The new white-collar exemption regulations are effective January 1, 2020, so employers don’t have much time to evaluate their current payroll practices and take corrective actions if necessary.

Regulatory changes often create uncertainty, so employers should carry Employment Practices Liability Insurance that includes limited wage & hour coverage. Please contact us if you would like to learn more about employment practices liability insurance.

FLSA Update: Minimum Salary for Exempt White-Collar Employees Increasing in 2020

It’s actually happening. The Department of Labor is increasing the minimum salary threshold for the Fair Labor Standards Act’s white-collar minimum wage and overtime exemptions. On January 1, 2020, an estimated 1.3 million executive, administrative and professional employees will lose their FLSA-exempt status. Without some form of corrective action, employers will have to start paying overtime compensation to these newly-nonexempt employees.

The current standard salary level for exempt white-collar employees is $455 per week. Under the Final Rule, the minimum standard salary level for exempt executive, administrative and professional employees will be:

Weekly:               $684       (+ $229)

Bi-weekly:           $1,368   (+ $458)

Semi-Monthly:  $1,482   (+ 496.17)

Monthly:             $2,964   (+ $992.34)

Annually:            $35,568 (+11,908)

The Final Rule also:

  • increases the total annual compensation requirement for exempt “highly compensated employees” from $100,000 to $107,432 per year;
  • allows nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level; and
  • revises the special salary levels for workers in U.S. territories and in the motion picture industry.

Employers don’t have much time to evaluate options and take corrective action, which depending on the circumstances, may include:

Corrective actions should be based on business necessity and applied in a uniform, non-discriminatory manner. They must also be implemented no later than January 1 ,2020.

Since change often creates uncertainty, employers should carry Employment Practices Liability Insurance that includes limited wage & hour coverage. Please contact us if you would like to learn more about employment practices liability insurance.

Did You Know…Your Payroll Software May Be Rounding Employees’ Work Hours Illegally?

On July 1, 2019, the Department of Labor’s Wage and Hour Division (WHD) issued an Opinion Letter addressing permissible rounding practices for calculating hours worked under the Fair Labor Standards Act. Opinion Letters represent the WHD’s official, written opinion on how a particular law applies in specific circumstances presented by the person or entity requesting the letter.

Hours worked under the FLSA ordinarily include all the time during which an employee is required to be on the employer’s premises, on duty or at a prescribed workplace. Though FLSA regulations recognize that minor differences between time clock records and actual hours worked cannot ordinarily be avoided, they caution against major discrepancies that can raise doubts as to the accuracy of the records of hours actually worked. An employer’s rounding practices can create the kinds of discrepancies that should be avoided.

The regulations acknowledge that employers have a history of recording start- and stop-times to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. The presumption is that this arrangement averages out so that employees are fully compensated for all the time they actually work. For enforcement purposes, rounding practices will only be accepted if they do not result, over a period of time, in failure to compensate employees properly for all the time they actually worked.

The rounding practices at issue in the Opinion Letter involved payroll / time clock software that converts recorded work time into a number that is extended out to six decimal points. For example, 7 hours and 30 minutes is converted into 7.500000 hours. The software then rounds these numbers to two decimal points. If the third decimal is less than .005, the second decimal stays the same (ex. 6.784999 hours rounds down to 6.78 hours). If the third decimal is .005 or greater, the second decimal rounds up by 0.01 (ex. 6.865000 hours rounds up to 6.87 hours). Finally, the software calculates pay by multiplying the rounded hours number by the prevailing wage.

The Opinion Letter notes that the software’s rounding function may result in downward rounding of no more than 0.29994 minutes per day and upward rounding by as much as 0.3 minutes per day, which is consistent with the WHD’s policy of accepting rounding practices that average out so that employees are compensated for all the time they actually work. The employer’s policy was characterized as neutral on its face and as applied. Accordingly, the WHD concluded that this rounding practice does not violate FLSA regulations. Wage and hour violations pose a substantial risk to most employers, but Employment Practices Liability Insurance can protect against various employment-related claims, including limited coverage for various wage and hour claims. Please contact us if you would like to learn more about employment practices liability insurance