“The potential $15-per-hour Minimum Wage State Constitutional Amendment is a ‘Hot Topic’ for our industry,” said Samantha Padgett, General Counsel for the Florida Restaurant & Lodging Association (FRLA) to roughly 50 business people at Nervous Nellie’s on Thursday, August 22. “This is something that will impact your businesses should it appear on the November 2020 ballot and Floridians pass it with at least 60% of the vote.”
If the $15-per-hour State Constitutional Amendment makes the November 2020 ballot and passes, Florida’s current $8.46-per-hour Minimum Wage will increase to $10-an-hour in 2021, then an additional dollar-per-hour through 2026 to $15-an-hour, equating to 7.1% annual raises and a 77% overall increase. Under this proposal, Florida would retain the Tip Credit of $3.02-per-hour, meaning employers would increase the corresponding Cash Wage. The Fair Labor Standards Act allows employers to apply the Tip Credit toward the Federal Minimum Wage, meaning they pay their tipped employees a lower figure known as the Minimum Cash Wage, though Padgett pointed out that if the Federal Government chooses to increase the Minimum Wage, “the Tip Credit will disappear altogether.”
Under the current Florida Minimum Wage of $8.46-per-hour, businesses must pay their employees a Required Cash Wage of $5.44-an-hour, or the difference from $8.46 minus the $3.02 Tip Wage. Should the Ballot Initiative pass, the Required Cash Wage in 2021 will go up by 28.3% to $6.98, or the difference from $10 minus $3.02; and continue to rise each year until 2026 when the Required Cash Wage will reach $11.98 or $15-an-hour minus $3.02. The Required Cash Wage will increase an average of 9% over that six-year period.
Padgett informed the audience that it is almost a foregone conclusion that the $15-an-hour Minimum Wage Initiative will be on the November 2020 ballot. “‘Mr. Marijuana,’ Orlando Lawyer John Morgan, is bankrolling it, leveraging it with an even larger amount of money. To get a Constitutional Amendment on the ballot, all you need is 766,200 verified signatures by February 1, 2020, and ballot language approved by the Florida Supreme Court. Those who favor it already have 511,100 valid signatures, and we hear that number is now around 548,000 so they are trucking along. The ballot language is pretty straight-forward, so Florida Supreme Court approval is likely. Early polling indicates there is broad support to approve the Minimum Wage Amendment, right now at somewhere around 72%.”
Padgett stated that, despite these figures, the FRLA and its members still have two advantages to defeat the potential Amendment: “We have time to get out our message, and it must pass by at least that 60% threshold. One thing we do not recommend, however, is you go to your employees and the general public and say that if this passes, it will be Armageddon and your hair will start on fire and all your businesses will close, but be honest with them about the broad impacts to the hospitality industry. Employers will use more automation, thus eliminating employment opportunities, particularly at the entry level. Our surveys indicate the biggest positive impact for us in increasing the Minimum Wage is higher prices all across the board, as that gets the most attention.”
Another selling point, Padgett stressed, is that while most Floridians favor a Minimum Wage increase, they have no idea what the current figure is or how much the Amendment will raise it. “When they learn the actual dollar amounts, support for the proposed Amendment dips significantly, to between 60 to 64%.” She acknowledged that the toughest conversation they will all have is in attempting to convince their own employees to vote against their own pay increase! “That will be a challenge, but you must ask them if their own budgets increased by 77%, how would they be able to meet that?” Padgett concluded that “perhaps the greatest challenge to this within the hospitality industry is we must overcome our own feeling of inevitability that the Minimum Wage Amendment will pass, as that is a place where we do not want to be! Proper early messaging can change the conversation, without being political, so now is the time to act!”
Visit Florida & SWFL Days
In a related topic, Padgett briefly touched on efforts to convince the Florida Legislature to renew funding for “Visit Florida,” the State Agency that assists local tourism officials and partners with cooperative marketing programs like advertising, sales, public relations, promotions, Welcome Centers and other opportunities. “The State currently funds this with a $50 million appropriation, but the program is due to sunset in June 2020, and that would mean that Florida would be the only state in the nation without a marketing arm! If we lose ‘Visit Florida,’ it probably won’t affect larger businesses, but it absolutely will our smaller partners, as it brings people here from out-of-state, and when we have a disaster, like water quality here last year or Hurricane Michael in the Panhandle, to tell visitors that the state is still open for business, so talk to your Legislators as well about keeping ‘Visit Florida’ in business!”
Just before the conclusion of the meeting, Jacki Liszak, Executive Director of the Greater Fort Myers Beach Chamber of Commerce that assisted in hosting the “Minimum Wage Forum,” informed the audience that “‘Southwest Florida Days’ with our State Legislators will be during the last week of January in 2020, and our Chamber will attend along with the other six Southwest Florida Chambers, to speak individually with the Legislators, to tell them our real stories from real people, and we would like our business owners to join us, because as we learned last year with water quality, these conversations are real game changers!”
For more information on the potential Minimum Wage Amendment, see FRLA.org/minimum-wage or for questions on either that or Visit Florida, contact Padgett directly at firstname.lastname@example.org; to speak with Jacki about attending “Southwest Florida Days” in Tallahassee, call the Greater FMB Chamber of Commerce at 239-454-7500.
By Gary Mooney