HB 690 puts Ohio employers at serious risk. It leads Ohio employers to believe that they are exempt from Section 34a when they in fact are not. This can lead to a tripling of minimum wage costs and worse.
To understand how HB 690's sponsor can convince lawmakers to vote for an unconstitutional law, consider the problem that Issue 2 created for summer camps, which have become a bit of a poster child for "minimum wage relief." Before Issue 2, camp counselors were exempt from Ohio and federal minimum wage laws. Ohio summer camps did not have to pay the minimum wage, which allowed the camps to craft creative compensation arrangements for their counselors, such as the payment of a flat stipend at the end of the summer plus, of course, free room and board.
With the passage of Issue 2, however, the camps must now pay $6.85 an hour for every hour worked, which amounts to a huge increase in counselor costs. Worse yet, no one knows how many hours the counselors are considered to have "worked," since they stay at camp most of the summer. So, Issue 2 hit summer camp owners particularly hard.
HB 690's supporters are telling the summer camps that it will exempt them from the minimum wage. HB 690 does not, however, protect the summer camps. The minimum wage requirement is in the constitution. A lower level law, even a state law, has no more effect on the minimum wage requirement than a city ordinance or my proclamations in this blog. Also, an Issue 2 violation does not require intent. A violation occurs and the liability attaches (3x penalties and attorneys' fees) even with complete good faith by the employer that it is in compliance.
So, if HB 690 passes, this is what the summer camps will get:
- a class action law suit covering camp counselors and all "similarly situated" camp counselors in Ohio.
- the employee's legal bill for the class action. A constitutional challenge to a state law will likely go to Ohio's Supreme Court, which will be very expensive. Issue 2 requires the employer to pay the employee's legal fees upon proof of a violation.
- unpaid minimum wages, times three, since employee's are entitled to the unpaid minimum wage, plus an amount equal to twice that.
The real dilemma for the camps will arise on pay day for the counselors. At that point the camps must decide whether to pay the wage or risk the liability. If I was running a summer camp, I would get a written opinion from an employment law specialist with a paid up malpractice policy that HB 690 will me before I risked the liability.
As for the HB 690's sponsors, he should guarantee Ohio employers that HB 690 will protect them. If he cannot give that guarantee, he should withdraw the bill.
