Ohio Minimum Wage FAQs.
by Neil Klingshirn
For updates, see My Employment Bogger's Ohio's Minimum wage posts.
Contents
What is the new Ohio minium wage?
When does the new Ohio minimum wage take effect?
Will the new minimum wage go up in the future?
Are there any exceptions to the new, inflation increased minimum wage?
Is Ohio’s new minimum wage rate an entirely new law or does it just change existing laws?
Is the state of Ohio covered by the new minimum wage law?
What are there new record keeping requirements?
Who is entitled to see the records kept by employers?
How tough are the enforcement rules for Ohio’s new minimum wage law?
Who is an “interested party” that can make a complaint to the State of Ohio?
What happens if the employee wins?
Does the new minimum wage law prohibit retaliation against employees who assert their rights?
How will Ohio’s new minimum wage law change business and employment in Ohio.
Ohio's New Minimum Wage Law
Q. What is the new Ohio minium wage?
A. On November 7, 2006 Ohio voters passed Issue 2, which amended Ohio’s constitution. It requires employers to pay a minimum wage of $6.85 per hour.
Q. When does the new Ohio minimum wage take effect?
A. Ohio’s new minimum wage must be paid beginning January 1, 2007.
Q. Will the new minimum wage go up in the future?
A. Yes. Each year the minimum wage will increase by the rate of inflation for the prior 12 months. If the rate of inflation is 6% in 2007, for example, the minimum wage will increase to $7.26 in 2008.
Q. Are there any exceptions to the new, inflation increased minimum wage?
A. Yes. Employees under the age of 16 and employees of small businesses (less than $250,000 in annual gross revenues) are not entitled to the new minimum wage. However, the minimum wage amendment to Ohio’s constitution requires employers to pay those employees at least the federal minimum wage. Therefore, if they fail to pay the federal minimum wage, those employers will violate both federal and Ohio minimum wage laws. That will be important because, as seen below, Ohio’s new minimum wage law has some very tough enforcement provisions.
Q. Are there any other exceptions?
A. The minimum wage amendment includes several more exceptions. They are:
- Employers can pay “tipped” employees (i.e., employees who receive tips as part of their pay) as little as one half of the new minimum wage, so long as tips make up the other half.
- Family owned businesses do not have to pay the new Ohio minimum wage to their own family members; and
- Employees who work “in or about the property of the employer or an individual’s residence on a casual basis” are not covered by the new minimum wage law.
In addition, the amendment allows the state of Ohio to permit employers to pay individuals who have a disability that affects their opportunity for employment a wage rate below the new minimum.
Finally, the Ohio Department of Commerce has published its official Minimum Wage Poster containing the exemptions under existing Ohio law that it will apply to the new minimum wage amendment. They include:
- Any individual employed by the United States;
- Any individual employed as a baby-sitter in the employer's home,
or a live-in companion to a sick, convalescing, or elderly person whose
principal duties do not include housekeeping;
- Any individual employed as an outside salesman compensated by commissions
or in a bona fide executive, administrative, or professional capacity,
or computer professionals.
- Any individual who volunteers to perform services for a public agency
which is a State, a political subdivision of a State, or an interstate
government agency, if the individual receives no compensation or is
paid expenses, reasonable benefits, or a nominal fee to perform the
services for which the individual volunteered; and such services are
not the same type of services which the individual is employed to perform
for such public agency.
- Any individual who works or provides personal services of a charitable
nature in a hospital or health institution for which compensation is
not sought or contemplated;
- Any individual in the employ of a camp or recreational area for children
under eighteen years of age and owned and operated by a non-profit organization
or group of organizations.
- Employees of a solely family owned and operated business who are family members of an owner.
Agricultural, home health and amusement park workers are not included in these exemptions.
Q. Is Ohio’s new minimum wage rate an entirely new law or does it just change existing laws?
A. Both. The amount of the minimum wage, the fact that it will increase with inflation and much of the tough enforcement rules are new. The new minimum wage law incorporates many of the existing federal minimum wage definitions, however, which have not changed.
Q. Is the state of Ohio covered by the new minimum wage law?
A. Yes. Every political subdivision, which includes counties, cities, townships, school districts and other governmental authorities, are covered as well.
Q. Are there new record keeping requirements?
A. Plenty. The new minimum wage law requires employers to keep a record for three years after each employee’s last day of work of the employee’s:
Name;
Address:
Occupation;
Pay rate;
Hours worked for each day worked and
Each amount paid an employee.
Q. What about a long service employee? Must an employer keep records of the number of hours worked for each day for 33 years for an employee who retires after 30 years?
A. That is what the language of the amendment appears to say. The Ohio General Assembly will probably pass a law implementing this constitutional amendment, which might clarify how long employers must keep wage records.
Q. Who is entitled to see the records kept by employers?
A. The employer must provide the information without charge to the employee or a person acting on behalf of the employee upon request. In other words, if an employee’s lawyer or union representative asks for the information, the employer must provide it.
Q. How tough are the enforcement rules for Ohio’s new minimum wage law?
A. Sharp teeth tough. Employers who fail to comply with the new minimum wage law face:
Complaints by employees, persons acting on their behalf and/or any other interested party to the State of Ohio. Under the new minimum wage law, Ohio must promptly investigate and resolve the complaint.
Investigations by the State of Ohio on its own initiative. Employers must provide the State of Ohio with any records related to the investigation and other information requested by Ohio.
Lawsuits by the State of Ohio, an employee or persons acting on behalf of an employee or all similarly situated employees.
Q. Who is an “interested party” that can make a complaint to the State of Ohio?
A. That is not entirely clear at this point. Interested parties probably include unions, including those that do not yet represent the employer’s employees. By the plain language of the new minimum wage law it could also include a competitor who makes a complaint to even the playing field.
Q. How can a lawsuit be filed?
The new minimum wage law allows a lawsuit to be filed:
Within three years of the violation or when the violation ceased, if it was a continuing violation. Federal and existing Ohio law usually required suit to be filed within two years. In addition, the “continuing violation” rule might permit suit for violations that stretch back more than three years, if the employee can prove that the violation continued during the entire time period.
In the county where the employee resides. In an action involving similarly situated employees, the employees could pick the county they consider friendliest, so long as at least one of them lives there.
Without waiting for an investigation by the State of Ohio or other process to finish first and without any proof requirements beyond those that apply to normal civil suites.
Q. What happens if the employee wins?
A. When an employer is found by the State of Ohio or a court to have violated Ohio’s new minimum wage law, it must, within 30 days of the finding:
Pay the employee’s back wages;
Pay damages equal to an additional two times the back wages;
Pay the employee’s costs and reasonable attorneys’ fees.
In other words, an employer will have to pay three times the unpaid minimum wages, plus the employees’ attorneys’ fees.
Q. Does the new minimum wage law prohibit retaliation against employees who assert their rights?
A. Yes. It also prohibits employer retaliation against people who provide assistance to employees asserting their rights. Employers who retaliate must pay an amount “sufficient to compensate the employee and deter future violations,” which amount is not less than $150 for each day that the violation continued, presumably after the employee or other person asserted their rights. The requirement to compensate retaliation victims in an amount sufficient to deter future violations is basically an automatic punitive damages requirement.
Q. How will Ohio’s new minimum wage law change business and employment in Ohio.
A. The changes remain to be seen. If market rates for employees go above the constitutionally required minimum wages, the changes will probably be minimal. However, it is safe to say that the inflation indexed minimum wage rate will help employees from slowly slipping further behind as inflation eats up their wages. On the other hand, it could eventually place Ohio at a disadvantage if its minimum wage rate is above the federal rate and that of other states.
The aggressive enforcement provisions will undoubtedly visit serious pain on employers who fail to pay the minimum wage. On the other hand, the existence of serious penalties for violating the law will likely mean fewer violations, allowing employees to collect the minimum wages that they have earned.
Q. Where can I find more information on Ohio's new minimum wage law?
A. Here is a copy of Issue 2, the Ohio minimum wage constitutional amendment. We have also been posting answers to some of your questions on My Employment Blogger, at its discussion of Ohio's minimum wage. Posts include:
Ohio announces New Minimum Wage Exemptions
Implementing legislation is introduced for Issue 2
Must non-profit summer camps pay the minimum wage to camp counselors?
Can co-workers see my wages under Ohio's new minimum wage law?
You can also email Neil Klingshirn with an Ohio minimum wage question. While an email is not a substitute for particularized legal advise (we offer an initial consultation at a cost of $200), I will do my best to provide a brief answer to your email question so that you can decide if a consultation makes sense for you. Please note that I retain the right to post an answer to such questions on My Employment Blogger for the benefit of other visitors as well.
My Employment Lawyer.com is a Service of Fortney & Klingshirn, serving individuals in Ohio.
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