By 2004 constitutional amendment, Florida raised and indexed the state’s minimum wage to rise with inflation. It also limited the tip income that service employers could claim as compensation. It sounds like a technicality, but labor costs for non-fast-food restaurants nearly doubled in five years as a result.
To fix this, a state Senate bill would have guaranteed food servers an hourly wage 30 percent higher than required by law. In return, employers would have been granted greater flexibility to recognize employee tips as income, as the IRS already does (“Senate panel OKs hourly pay cut”).
Typical restaurants keep around 3 cents’ profit for each sales dollar. Under current law, they face tough choices: provide the same service with fewer employees and shorter shifts, or move toward more self-service. Either way, the opportunity to earn tips decreases. If costs keep rising, diners will start paying a lot more, or get used to ordering via computer terminal. The Senate bill forestalled such unintended consequences with a compromise on the long-standing labor costs debate, while adhering to voters’ wishes by guaranteeing a higher wage payment.
It’s not often that a state legislature has the opportunity to pass a bill that both employers and employees can support. Let’s hope they don’t miss the opportunity next year.