PENSACOLA, Fla. — The Florida minimum wage climbs to $15 an hour on Wednesday, Sept. 30, and some Pensacola business owners say the higher pay could help them hold onto, and attract more of, the Alabama workers who already cross the state line for jobs in Florida.
The final step in a six-year increase approved by Florida voters raises the minimum for non-tipped workers by $1, from $14 to $15 an hour. Tipped employees in Florida will earn a minimum cash wage of $11.98 an hour before tips.
Across the line in Alabama, which has no state minimum wage, the federal minimum of $7.25 an hour still applies, and employers of tipped workers can pay a cash wage as low as $2.13 an hour. That gap has business owners on both sides of the Perdido River watching closely, though they don’t all agree on what it will mean.
Florida Minimum Wage Increase at a Glance
- Effective date: Wednesday, Sept. 30, 2026
- Florida minimum wage: $15 an hour, up from $14
- Florida tipped minimum cash wage: $11.98 an hour
- How it happened: Florida voters approved Amendment 2 in November 2020, phasing in $1 annual increases each Sept. 30 starting in 2021
- What’s next: Beginning Sept. 30, 2027, Florida’s minimum wage will be adjusted annually for inflation
- Alabama comparison: No state minimum wage; the federal minimum of $7.25 an hour, or $2.13 for tipped workers, applies
‘It’s Worth the Drive’
Collier Merrill, president of Pensacola-based Great Southern Restaurants, said his company already employs people who commute from Alabama. Great Southern’s restaurants include The Fish House, Jackson’s Steakhouse, Five Sisters Blues Cafe and Atlas Oyster House.
“We have employees now that come over from Alabama,” Merrill said. “Matter of fact, some of our hostesses are going to the USA now, University of South Alabama. They come back every weekend to work here, instead of over there.”
Workers travel from as far away as Mobile to work in Pensacola, a trip of roughly 60 miles each way along Interstate 10. Some businesses located well away from the state line say they are already seeing Alabama residents make that drive for better pay.
Merrill laid out the math as he sees it for a full-time worker.
“Their [Alabama’s] minimum wage, so the tipping point is $2,” Merrill said. “The minimum wage that we’re going to $15, over there is $7 and some odd cents, so we’re double. And they go work a 40 hour shift. We’re going to get $280 versus $560, so it’s worth the drive to come over and go back.”
At the exact rates, a 40-hour week at Alabama’s $7.25 federal minimum comes to $290 before taxes, while the same week at Florida’s new $15 minimum totals $600, a difference of $310. For tipped workers, the difference in guaranteed cash wages is even larger in percentage terms: $11.98 an hour in Florida compared with $2.13 in Alabama, although in both states tips make up much of what servers and bartenders actually take home.
Florida business owners said they believe the higher wage will help them retain the Alabama workers they already have and bring in more.
Some Alabama Managers Aren’t Worried
Opinions on the Alabama side are split.
One Alabama manager, who declined to appear on camera, called the decision a no-brainer and said workers will undoubtedly head to Florida to earn $15 an hour rather than the roughly $7 paid where he works.
Others see little cause for concern. Scott Mace, manager of Sweet Cone Alabama, said the seasonal nature of beach business, and the tips that come with it, mean his workers already do well during the busy months.
“No, I’m not worried and the reason being is personally where we’re at on the beach, it’s very seasonal,” Mace said. “So when the season is on the tips, we make way out, pay the 15. And also it’s seasonal out here, so most of my workers are going back to college or high school. And so at that point they’re only part time anyway so it’s kind of like part time seasonal help.”
Mace said morale among his staff is high.
“Everybody’s really happy out here,” he said. “We love what we do and the tips are really good.”
Some Alabama workers, who also declined to go on camera, said they had considered working in Florida. But one of them noted that the restaurant where they work is not seasonal, and that year-round tips nearly outweigh what they could earn per hour across the state line.
How Florida Got to $15
Florida’s path to a $15 minimum wage began at the ballot box. In November 2020, voters approved Amendment 2, a constitutional amendment that required a 60% supermajority to pass. It cleared that bar with about 60.8% of the vote.
The amendment raised the state minimum wage to $10 an hour on Sept. 30, 2021, and then by $1 every Sept. 30 until it reached $15 in 2026. Starting Sept. 30, 2027, the wage will return to annual adjustments for inflation, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers.
Florida’s tipped minimum is tied to the regular minimum. Under the state constitution, employers of tipped workers can count a fixed tip credit of $3.02 an hour toward the minimum wage, which is why the tipped cash wage rises in step with the regular rate: $15 minus $3.02 equals $11.98. If a worker’s tips don’t bring total pay up to the full minimum, the employer must make up the difference.
The measure had its critics. Some business groups opposed Amendment 2 in 2020, arguing that steady, mandated increases would raise labor costs for small businesses and could lead to fewer jobs or higher prices. Supporters argued that a higher floor was needed to keep up with rising living costs in Florida.
Alabama Relies on the Federal Minimum
Alabama is one of a handful of states, along with Louisiana, Mississippi, South Carolina and Tennessee, that has not adopted its own minimum wage law. That means the federal minimum under the Fair Labor Standards Act, $7.25 an hour since July 2009, sets the floor for most Alabama workers.
Federal law allows employers to pay tipped workers a cash wage of $2.13 an hour, as long as tips bring their total earnings to at least $7.25 an hour. If they don’t, the employer must make up the difference.
Alabama cities cannot set their own higher minimums, either. In 2016, the Alabama Legislature passed a law blocking local governments from establishing minimum wages above the state standard, a response to a Birmingham ordinance that would have raised pay in that city. Bills to create a state minimum wage above the federal level have been introduced in the Legislature over the years but have not become law.
In practice, many Alabama employers already pay more than the minimum, particularly in a tight labor market and in tourism-heavy areas along the coast. Still, the legal floor on the Florida side of the line will now be more than twice as high as on the Alabama side.
What It Could Mean for the Gulf Coast Labor Market
The Pensacola and Mobile metro areas, along with coastal Baldwin County, share a regional economy heavily tied to tourism, hospitality and restaurants. Those industries employ large numbers of hourly and tipped workers, and many of their jobs sit within easy driving distance of the state line.
For workers in Mobile and Baldwin counties, the calculation involves more than the hourly rate. Commuting costs, time on the road, the availability of hours, how busy a restaurant is year-round and how much a worker earns in tips can all tip the balance one way or the other, as the Alabama workers who spoke about their jobs pointed out.
For Alabama employers, especially those that are open year-round and compete for the same pool of servers, cooks, hosts and hotel staff, the new Florida rate may add pressure to raise wages or offer other benefits to keep experienced staff. For seasonal businesses that rely on students and summer help, like the beach shop Mace manages, the effect may be more limited.
What is clear is that the Sept. 30 increase closes out the voter-approved phase-in. From 2027 forward, Florida’s minimum wage will rise with inflation, while Alabama’s will stay at the federal level unless Congress or the Alabama Legislature acts.
What Workers Should Know
- Workers employed in Florida are covered by Florida’s minimum wage regardless of which state they live in.
- Florida’s new rates of $15 an hour, and $11.98 for tipped workers, take effect Sept. 30.
- Tipped workers in both states must earn at least the full minimum wage once tips are counted, or the employer must make up the difference.
- Alabama residents who work in Florida should check with a tax professional about how their income is reported; Florida has no state personal income tax, but Alabama taxes its residents’ income wherever it is earned.