3 Strategies for Managing the New Minimum Wage
On Election Day 2020, Florida voters passed Amendment 2, which raises the minimum wage in our state. What does that mean for construction and your crew?
Quite simply, it means you will need to plan ahead. If you employ entry-level workers, you will need to take steps to increase their hourly rate in the months and years to come.
The current minimum wage is $8.56 an hour. Per the amendment, which passed 61 percent to 39 percent, that wage will increase to $10 an hour on September 30, 2021. Then on September 30, for each of the following five years, it will increase by an additional $1. The minimum wage will reach $15 on September 30, 2026.
Will it stop there? Not necessarily. Each year, the minimum wage will continue to be adjusted based on inflation.
As you evaluate your current workers and hire new ones, keep this increase in mind, as it will affect your overall budget. Even if you already pay all your workers more than the minimum wage, this new level may drive up hourly wages in many industries. Competition for qualified, reliable workers could become even more intense.
Depending on your company's situation, you may need to make adjustments. Here are some options:
- Hire fewer people: If you cannot afford the higher wage, you may need to find ways to get by with fewer workers. However, that could be problematic when trying to keep projects on schedule. You do not want to lose business because you are understaffed.
- Lower costs in other areas: See if there are other expenditures to cut. For instance, if you are outsourcing some services, can you bring them in-house? Are there any extraneous items, such as memberships or travel, you can eliminate?
- Raise your rates: Between rising material costs and the minimum wage increase, you may need to charge your customers more. Review your upcoming projects and talk to your legal and financial advisers to review what is feasible. If you are in demand, a slightly higher rate may help balance your budget.
Do not let the impending minimum wage increase wreak havoc on your business. Take time to review your budget and develop a strategy for implementing the new requirements. Do so with concern and compassion for your employees, as well as confidence in your success.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.