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 firstname.lastname@example.org.