On Oct. 1, Florida’s minimum wage increased by another dollar to $14 per hour – the fifth hike in as many years – and some local business owners, particularly those in the food and beverage industry, say the latest boost is coming at a difficult time.
Lee Olsen, general manager of Waldo’s restaurant at The Historic Driftwood Resort, said keeping his 52 employees paid has become his biggest battle. “It’s becoming more and more difficult,” Olsen said. “Because of the economy, we’re all seeing a decrease in customers. Instead of going out to dinner once or twice a week, people are now going out maybe once every two weeks.”
Olsen said he is revamping his menu this fall so that the restaurant can offer “smaller portions of favorite dishes at affordable prices, along with adding other lower-cost items that are a little more profitable.”
“We have to keep creeping up our prices, but the economy is battling against us at the same time,” Olsen said.
Florida voters approved Amendment 2 in November 2020, which set the minimum wage at $10 beginning in 2021, climbing $1 per year to eventually reach $15 per hour by 2026.
“I don’t think most people really understood what they were voting for,” said Joey Replogle, general manager at the Ocean Grill restaurant in Sexton Plaza. “People assume that only janitors or dishwashers earn minimum wage, but tipped employees earn minimum wage, too. I don’t think people knew it would make dining out more expensive.”
The minimum wage for tipped employees, such as servers and bar tenders, is $3.02 less than the minimum wage for nontipped workers — the idea being that tips should make up the difference. This year, the tipped minimum wage is $10.98 per hour – double what it was in 2019. And it goes up to $11.98 in 2026.
Like others in the restaurant industry, Replogle had to change the way he structures his business. “The first year, I reclassified all my bussers, hostesses and food runners as tipped employees so I could begin paying them the tipped minimum,” Replogle said.
He then had servers and bar tenders contribute a larger share of their tips to the tip pool, which is shared with the other dining room employees.
“Most of my front of the house employees understood why it was necessary, to make things fairer for everyone,” Replogle said. “Next year I’ll probably have to make another adjustment.”
The first couple of minimum wage increases were not a huge problem for Rachelle Nesbit, general manager of Citrus Grillhouse at 1050 Easter Lily Lane. But this year she had to make some major adjustments.
“I started by cross-training my employees, teaching each of them how to do all of the jobs at the restaurant,” Nesbit said. “That way, we’ve been able to get by with a skeleton crew during the day. Any of us, when needed, will wash dishes, run food, bus tables, tend bar or serve. Now we only need four of us at lunch time.”
“It’s a competitive industry and everybody is going through the same issues,” said Rob Benetti, general manager of Costa d’Este Beach Resort and Spa.
“People don’t understand that it’s not just a dollar increase in the minimum wage,” he said.
“Depending on the employee, by the time you add in employer contributions for Social Security, Medicare, disability insurance and Worker’s Comp, a dollar turns into $1.30 or $1.40.”
“That’s why we focus on quality and make it worthwhile for clients,” Benetti said. “Our goal is to adjust to the times without compromising quality.”
