Ohio announces the new Minimum Wage Exemptions

The Ohio Department of Commerce cleared up most of the confusion created by House Bill 690, the legislation that implemented Ohio's minimum wage. Commerce, which enforces the new minimum wage, included the following exemptions on its new Minimum Wage poster:

INDIVIDUALS EXEMPT FROM MINIMUM WAGE
(ORC 4111.14 (B))

1. Any individual employed by the United States;
2. 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;
3. Any individual employed as an outside salesman compensated by commissions or in a bona fide executive, administrative, or professional capacity, or computer professionals.
4. 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
1. 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
2. such services are not the same type of services which the individual is employed to perform for such public agency.
5. 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;
6. 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.
7. Employees of a solely family owned and operated business who are family members of an owner.

Notably missing from the Commerce exemptions are agricultural, home health and amusement park workers. The Columbus Dispatch reports that the absence of these exemptions "stunned Sen. Steve Stivers, one of the most vocal advocates of exempting home health-care, farm and amusement-park workers from the minimum-wage increase approved in November by Ohio voters." The Dispatch reported that an estimated 20,000 health-care workers and 6,000 to 8,000 farm labor employees will now receive the new minimum wage.

Sen. Stivers is stunned because he thought HB 690 wrote off agricultural and home health care workers from Ohio's new minimum wage. According to the Commerce Department, however, HB 690 does not, in fact, exempt those workers.

What is behind this stunning turn of events? The Commerce Department's decision, which restores the new minimum wage to employees covered by ballot Issue 2, is based on simple legal reasoning.

The starting point is HB 690, which is codifed as Ohio Revised Code section 4111.14. Somewhere between its introduction and final passage the definition of "employee" in 4111.14(B) evolved to exclude:

individuals who are excluded from the definition of "employee" under 29 U.S.C. 203(e) or individuals who are exempted from the minimum wage requirements in 29 U.S.C. 213 and from the definition of "employee" in this chapter.

(emphasis mine) This creates two exemptions to the minimum wage, which are those employees exempted from the definition of 203(e), which is not in dispute here, or

individuals who are exempted from the minimum wage requirements in 29 U.S.C. 213 and from the definition of "employee" in this chapter.

According to the Columbus Dispatch, the Commerce Department is "interpreting that you've got to be in both of those to be exempted from Ohio's minimum wage," quoting Robert Kennedy, superintendent of the Commerce Department's Division of Labor & Worker Safety.

This is a fair interpretation. It turns on the word "and" meaning "and" rather than "or." That is, an employee is only exempt from Ohio's miniminum wage if exempted from both the federal and Ohio minimum wage. Since the rules of statutory interpretation require courts to give words their plain meaning, reading "and" to mean "and" is a sound legal position.

This still begs the question of whether agricultural, home health and amusement park workers are both "individuals who are exempted from the minimum wage requirements in 29 U.S.C. 213" and from "the definition of 'employee' in this chapter." The answer is that the federal minimum wage excludes these employees, but not Ohio's minimum wage.

Chapter 4111 defines "employee" in 4111.14(B) and 4111.03. Quoted above, 4111.14(B) incorporates the definition of "employee" as found elsewhere in Chapter 4111. The definition of "employee" found elsewhere in Chapter 4111 is in Section 4111.03, which exempts the following workers from the definition of employee:

1. Any individual employed by the United States;
2. 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;
3. Any individual engaged in the delivery of newspapers to the consumer;
4. Any individual employed as an outside salesperson compensated by commissions or employed in a bona fide executive, administrative, or professional capacity as such terms are defined by the "Fair Labor Standards Act of 1938," 52 Stat. 1060, 29 U.S.C.A. 201, as amended;
5. 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;
6. A member of a police or fire protection agency or student employed on a part-time or seasonal basis by a political subdivision of this state;
7. Any individual in the employ of a camp or recreational area for children under eighteen years of age and owned and operated by a nonprofit organization or group of organizations described in Section 501(c)(3) of the "Internal Revenue Code of 1954," and exempt from income tax under Section 501(a) of that code; and
8. Any individual employed directly by the house of representatives or directly by the senate.

None of these exempted individuals are employed in agriculture, home health care or amusement park work. Thus, the Department of Commerce will not exempt those individuals from Ohio's minimum wage.

The Commerce Department's decision is significant for two reasons.
First, as the enforcement agency for the new minimum wage, Commerce will investigate and recover minimum wages for any employee except those listed above. Second, the Commerce Department's interpretation of the Ohio minimum wage exemptions are generally presumed to be correct, unless overturned by a court. As a result, every employee in Ohio will be entitled to the new Ohio minimum wage except for those listed above, unless and until an employer proves otherwise through a final appeal.

My take: the Department of Commerce made a reasoned interpretation of HB 690 that restored the will of the people.

Nice work.