More than the minimum

Not long ago, changes in both federal
and state minimum wage rules were
set into effect. Though many companies already pay slightly above minimum
wage to remain competitive in the market,
their ability to compete for top talent is significantly impacted by employee wages.
Companies rely on certain experts that collect or analyze information to assist in personnel training, wage comparisons, market
demand, etc. That service comes by way of
an HR team, consultants or a work force
development organization whose function
it is to make recommendations that
advance the company’s goal to remain a
viable employer.

“Our expertise lies in the research and
analysis of labor statistics and work force
trends that help identify a competitive edge
for our business clients,” says Julie Sanon,
senior vice president of operations at
Tampa Bay WorkForce Alliance.

Smart Business asked Sanon about the
minimum wage and the impact it can have
on your business.

What is the difference between the federal
and state minimum wages?

The Florida minimum wage is higher
than the federal minimum wage. As of
July 1, 2007, the Florida minimum wage
was increased to $6.67 per hour, which is
82 cents more than the federal minimum
wage of $5.85 per hour. Florida voters
approved a constitutional amendment,
creating Florida’s minimum wage in
2004. This minimum wage applies to all
employees in the state covered by the
federal minimum wage. Florida law
requires the Agency for Workforce
Innovation to calculate a new minimum
wage each year and publish the updated
figure on Jan. 1. The current minimum
wage represents a 4.2 percent change in
the federal consumer price index for
urban wage earners in the southern
region for the 12-month period prior to
Sept. 1, 2006.

Federal law dictates that businesses
must pay the higher of the two amounts.
The Florida minimum wage will prevail
over the federal rate, since it is the higher of the two.

What impact can minimum wage have on a
business?

Currently, 29 states plus the District of
Columbia have a minimum wage that is
higher than the standard set by federal law
for full-time workers. Starting May 2, 2005,
Florida businesses began paying their
employees at a higher minimum wage rate
than the federal minimum. Many people
suggest that increases in minimum wage
would negatively impact employment levels. However, using Florida’s track record
as an example, it shows no measurable
impact on jobs. For example, from 2005 to
2006, the minimum wage increased by 8.4
percent from $6.15 to $6.67. During this
period, the retail sector showed an average
increase of 2.1 percent in monthly employment levels. For the same period, the
leisure and hospitality sectors showed an
average increase of 3.8 percent in wages.

How should companies set their minimum
wage?

Many companies use attractive base pay
to stimulate performance and attract top-tier talent. Employers can leverage this
incentive option to establish themselves as employers of choice in a market cluster
competing for the same candidate base.

Regardless of the industry and occupation, as positions become available in your
organization, you want to stay competitive
in today’s market and continuously attract
the best talent. Companies can consider
higher base pay a financial investment that
the organization makes in its work force.
Becoming an employer of choice often can
be a key component of employee retention
and organizational stability. Turnover can
be extremely expensive. In the long run,
reducing turnover could end up costing
your business less than it costs to pay your
employees more than your competitors.

What happens if a business owner does not
comply with the minimum wage laws?

Like the federal wage and hour law, state
law often exempts particular occupations
or industries from the minimum labor standard generally applied to covered employment. If your company violates the Florida
minimum wage law, the affected employee
may bring a lawsuit to court. The Florida
state attorney general may also bring
action to enforce the minimum wage.

How do work force providers help local businesses?

Regardless of the size or type of industry
or business, training can increase staff
retention, which is a significant cost savings. TBWA offers an on-the-job training
program that is designed to upgrade the
skill level of new employees by introducing
them into their new working environment
under the supervision of a more experienced employee. The trainee is engaged in
productive work while acquiring knowledge and skills essential to job performance. Participating employers are reimbursed a percentage of trainee wages for
the cost of the training and for additional
supervision related to the training.

JULIE SANON is senior vice president of operations at Tampa
Bay WorkForce Alliance. Reach her at (813) 740-4680 x260 or
[email protected].