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More About Unpaid Wages And Overtime

Minimum Wage Requirements

Please review the most frequently asked questions below.

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WHAT IS THE CURRENT FEDERAL MINIMUM WAGE?

Federal Minimum Wage: The federal minimum wage was set as of July 24, 2009, at $7.25 per hour. There is currently no plan to change this rate for 2015.

IS FLORIDA'S MINIMUM WAGE DIFFERENT?

Current Minimum Wage in Florida: Currently, the minimum wage rate
is $7.93 per hour. The mimimum wage rate will change on January 1, 2015 to $8.05 per hour.


     
To learn more about whether you are covered under the Fair Labor Standards Act (FLSA), please click here.
To learn more about minimum wage laws, please click here
.

QUESTIONS AND INFORMATION ABOUT WAGES:

What is the minimum wage for workers who receive tips? Currently, an employer may pay a tipped employee not less than $4.91 an hour. This rate will increase to $5.03 per hour as of January 1, 2015. Your tips matter. Basically, under federal and state law, ALL tips earned belong to the employee, NOT the employer. Employers CANNOT require you to hand over your tips unless one of two exceptions apply:

Exception 1: The Employer's Tip Credit.
Some states allow employers to count all or part of an employee's tips toward the minimum wage requirement of $7.93 per hour. Your employer will NOT actually take your tips away from you. Rather, the employer is allowed to count some of the tips you receive, as if the employer itself paid them to you. If the employer elects to use the tip credit allowance, the employer must tell the employee before the credit is used. This includes telling the employee the amount of the credit, which will be taken by the employer. Tipped employees are entitled to earn at least the Florida mimum wage of $7.93 per hour. The tip credit is taken when the employer pays the tipped employee less than minimum wage, as long as the employee earns enough to make up the difference. The part the employer does not pay is considered the credit. When the tipped employee is unable to earn tips that equate to the Florida Minimum wage during any given shift, the employer must pay the difference. The tip credit in Florida is $3.02 per hour.

Exception 2: The Employee is a part of a valid tip pool. Federal and some state laws, allow a requirement for employees to pay part of their tips into a tip pool to be shared with other employees.This is called tip pooling or tipping out. You can be required to chip in a protion of your tips to be divided among a group of employees. You are NOT required to pay more than what is customary and reasonable. You must still be allowdto keep at least the full-minimum wage.


    Other Issues Affecting Tipped Employees:


How do I know what is considered a tip? Sometimes this is diffcult to understand. Generally, if a customer pays his or her bill with cash, and leaves more than the required amount after taxes are added to the bill, the remaining amount is a "tip." There is a different rule for the following two scenarios: (1) if the employer requires a "mandatory service charge" or (2) if the customer pays with a credit or debit card.

Mandatory Service Charges: Mandatory services charges occur when employer's place a premium on bills for specific reasons. For example: At a restuarant there is usually an 18% service charge for parties of 8 or more. In most states and under federal law, this is not considered a tip. Your employer can keep this money as a "service charge." This is because the law sees this as a contract between your employer and the customer not as a voluntary acknowledgement of good service by the server.

For a tip to be counted as a tip all of the following must be true: (1) Payment must be completely voluntary; (2) customer has the unrestricted right to determine the amount; (3)the amount cannot be set by the employer or the employer's policies, and will not be negotiable between the customer and the employer, and (4) the customer must have the right to determine who receives the payment.

Credit Card Charges: Because employers must pay processing fees for credit card transactions, an employer is allowed to reduce the tip amount in proportion to the service charge. This is the employee's "share" of the processing fee. An Example: If the employer uses American Express, the processing fee is usually 5% of the entire transaction. The customer's bill is $80.00, The customer leaves the employee a tip of 20% or $16.00. The total of the bill is $96.00. The employer would pay a fee of $4.80 to American Express. The employee's share would be $1.00. The employer is only required to give the employee $15.00 dollars.


    Other Questions About Wages:


Must young workers be paid the minimum wage? A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers. After 90 consecutive days of employment or the employee reaches 20 years of age, whichever comes first, the employee must receive a minimum wage of $7.25 per hour effective July 24, 2009. Other programs that allow for payment of less than the full federal minimum wage apply to workers with disabilities, full-time students, and student-learners employed pursuant to sub-minimum wage certificates. These programs are not limited to the employment of young workers.

What minimum wage exceptions apply to full-time students? The Full-time Student Program is for full-time students employed in retail or service stores, agriculture, or colleges and universities. The employer that hires students can obtain a certificate from the Department of Labor which allows the student to be paid not less than 85% of the minimum wage. The certificate also limits the hours that the student may work to 8 hours in a day and no more than 20 hours a week when school is in session and 40 hours when school is out, and requires the employer to follow all child labor laws. Once students graduate or leave school for good, they must be paid $7.25 per hour effective July 24, 2009. There are some limitations on the use of the full-time student program.

How often does the federal minimum wage increase? The minimum wage does not increase automatically. Congress must pass a bill which the President signs into law in order for the minimum wage to go up. In Florida, the minimum wage is raised every year based upon a cost of living formula.

To whom does the minimum wage apply? The minimum wage law (the FLSA) applies to employees of enterprises that have annual gross volume of sales or business done of at least $500,000. It also applies to employees of smaller firms if the employees are engaged in interstate commerce or in the production of goods for commerce, such as employees who work in transportation or communications or who regularly use the mails or telephones for interstate communications. Other persons, such as guards, janitors, and maintenance employees who perform duties which are closely related and directly essential to such interstate activities are also covered by the FLSA. It also applies to employees of federal, state or local government agencies, hospitals and schools, and it generally applies to domestic workers. The FLSA contains a number of exemptions from the minimum wage that may apply to some workers. The Wage and Hour Division has a Handy Reference Guide to the Fair Labor Standards Act that explains how the law applies.

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    I can help get your wages earned. Remember, if you are working more than 40 hours per week you are
    entitled to overtime. If you are not being paid overtime, contact me today for an in-office consultation.