Ohio Minimum Wage with Treble Damages and Attorneys Fees

posted by Neil Klingshirn  |  Jul 14, 2009 5:34 PM [EST]  |  applies to Ohio

On November 7, 2006 Ohio voters passed the Ohio Constitutional Minimum Wage, which amended Ohio’s constitution to require employers to pay a minimum wage of $6.85 per hour. The amount of the minimum wage must each year by the rate of inflation for the prior 12 months. 

Very few exceptions exist for the constitutional minimum wage. It covers almost all Ohio employers and employees.

Exceptions to the constitutional minimum wage

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 can be important because, as seen below, Ohio’s new minimum wage law has some very tough enforcement provisions.

In addition, the constitutional minimum wage exempts:

1. Tipped employees, (i.e., employees who receive tips as part of their pay), but only if the employer pays one half of the new minimum wage and tips make up the other half. If tips do not make up the balance of the minimum wage, the employer owes it.
   
   
2. Family owned businesses do not have to pay the constitutional minimum wage to their own family members; and
   
   
3. 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.
   

The state of Ohio may also 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, which has authority to enforce the constitutional and statutory minimum wage, has published its official Minimum Wage Poster defining exceptions under existing Ohio law that it will apply to the new minimum wage amendment. They include:

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 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.
   
   
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.
   

Agricultural, home health and amusement park workers are not included in these exemptions. These exemptions may be subject to litigation.

Public Employers

Every political subdivision, which includes counties, cities, townships, school districts and other governmental authorities, are covered as well.

Record Keeping Requirements

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:

1. Name;
   
2. Address;
3. Occupation;
4. Pay rate;
5. Hours worked for each day worked; and
6. Each amount paid an employee.
   

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.

Implementing legislation, codified at ORC section 4111.14, spells out the record keeping requirements further.

Enforcement

Employers who fail to comply with the new minimum wage law will face:

1. Complaints by employees, persons acting on their behalf and/or any other interested party to the State of Ohio Department of Commerce.
   
   
2. 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.
   
   
3. Lawsuits by the State of Ohio, an employee or persons acting on behalf of an employee or all similarly situated employees.
   

The implementing defines an “interested party” to mean "a party who alleges to be injured by the alleged violation and who has standing to file a complaint under common law principles of standing." This language was thought to have been placed in the constitutional amendment to permit unions, including those that did not yet represent the employer’s employees, to make complaints, as is allowed under prevailing wage law. The implementing legislation appears to be much narrower.

The statute of limitations for a constitutional minimum wage is within three years of the violation or when the violation ceased, if it was a continuing violation. Federal and existing Ohio law required suit to be filed within two years unless willful. 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.

Suit may be filed In the county where an 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.  Employees may file suit 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.

Remedy and Relief

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:

1. Pay the employee’s back wages;
   
   
2. Pay damages equal to an additional two times the back wages;
   
   
3. 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.

Anti-Retaliation Protection

The new minimum wage law prohibits 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.

External Links

Links to external sites with additional information about this topic.

• ORC section 4111.14, the implementing legislation.
• Workplace Fairness Minimum Wage article (focuses on federal minimum wage)

posted by Neil Klingshirn  |  Jul 14, 2009 5:34 PM [EST]  |  applies to Ohio