Ohio’s minimum wage constitutional amendment went into effect on January 1, 2007.  On April 4, 2007, section 4111.14 of the Ohio Revised Code went into effect.  This implementing statute clarified some of the ambiguities that are present in the amendment.  The statute should relieve anxious employers concerned about the possibility of onerous new requirements imposed by the constitutional amendment, but it may be too soon to rest easy.  Critics contend that the statute restricts the amendment in significant ways and is therefore unconstitutional. 

What are the minimum wage requirements?

 
Employers must pay their employees at least $6.85 per hour.  There are two exceptions: (1) the employee is under 16 years of age; or (2) the annual gross receipts of the business are less than $250,000.  In either of these cases, the employer must still pay employees at least the federal minimum wage.  This rate will be adjusted for inflation each year on January 1.

What if I have an employee who earns tips?

In Ohio an employer who has an employee who earns tips may take a "tip credit" towards the minimum wage they must pay.  An employer may pay an employee less than the minimum wage, but not less than half, if it can show that the wage paid plus the tips earned are equal to or greater than the minimum wage for each hour worked.

Who is considered an “employee” subject to the amendment?

Section 34a of the amendment defines “employee” in the same way that the Fair Labor Standards Act (“FLSA”) does but states that “[o]nly exemptions set forth in this section shall apply to this section.”  The statute, however, in § 4111.14(B) provides that an “employee” does not include those individuals who are exempted under the FLSA (e.g., professionals, administrative staff, executives, etc.).  The problem with this definition, critics contend, is that it adds exemptions to Section 34a, restricting its application. 

RECORDS

What records must be kept?

The amendment requires employers to record the “hours worked for each day worked” for each covered employee.  Section 4111.14(F)(4)(a) states that this “means the total amount of time worked by an employee in whatever increments the employer uses for its payroll purposes during a day worked by the employee.”  Specifically, “[a]n employer is not required to keep a record of the time of day an employee begins and ends work on any given day.”  If an employee is paid based on an 8 hour day, the employer need not keep track of the actual hours worked by that employee. 

Employers also must keep track of “[e]ach amount paid an employee.”  Section 4111.14(F)(5) defines this to be the “total gross wages paid to an employee for each pay period.”  The “pay period” may reflect the employer’s customary payroll practices (e.g., weekly, biweekly, monthly, etc.).

For whom must an employer keep records?

Section 4111.14(F)(4)(b) clarifies that an employer is not required to keep track of hours worked for employees exempt under the FLSA.  This addresses a concern that salaried exempt employees would have to keep more detailed records of their hours worked.

For how long must these records be kept?

 
Employers must now keep all employment records for as long as a person is employed and for a minimum of 3 years after termination. 

Who bears the cost of production?

The amendment requires that records be “provided without charge.”  Moreover, there is no limit on how often requests may be made.

Who may request these records?

Any employee or person acting on behalf of an employee may request employment records.  In addition, the State may request records on its own initiative or upon the filing of a complaint by an employee, any person acting on behalf of an employee, or any interested party.  Section 4111.14(G)(2) clarifies that employers may require an authorized representative to present signed and notarized written requests from each employee whose information is being requested.

What records may an employee or an employee’s representative request?

The amendment seemed to leave open the possibility that one employee could request the employment records of all employees.  But R.C. § 4111.14(G)(1) restricts an employee’s ability to request employment records to his own records only. 

RETALIATION

Can an employer discipline or discharge an employee who has requested records?

According to the amendment, “[n]o employer shall discharge or in any other manner discriminate or retaliate against an employee for exercising any right under this section or any law or regulation implementing its provisions or against any person for providing assistance to an employee or information regarding the same.”  Employers must anticipate that employees who request information may claim that subsequent employment actions were retaliatory. Note that an employer also may not retaliate against an employee who helps another employee.

When can a party assert a claim?

The statute of limitations for bringing claims is three years from the date of the violation or the date the violation ceased occurring.

The FLSA has a two-year statute of limitations for non-willful violations, which is extended to three years for willful violations.  The Ohio amendment ignores this distinction.

EMPLOYEE’S MONETARY RECOVERY

What can an employee recover if the state or court finds that the employer violated the amendment?

If an employer is found to have violated any provisions of the amendment, the employer must pay the employee the following within 30 days:

• Back wages
• Damages equal to two times back wages
• Employee’s costs
• Reasonable attorney’s fees

Instead of wages in retaliation claims, the state or court may award an amount sufficient to compensate the employee and to deter future violations, but not less than $150 for each day the violation continues.  Consequently, employers must be exceptionally careful if they take any adverse employment action against employees who request wage information.

Note that the amendment expressly states that payment may not be stayed pending appeal.

FEDERAL MINIMUM WAGE

Recently, congressional Republicans and Democrats agreed to a bill that would raise the federal minimum wage from $5.15 per hour to $7.25 per hour over the span of twenty-six months.  The minimum wage is scheduled to rise to $5.85 sixty days after the bill is enacted into law.  Twelve months later, the rate would go up to $6.55 with another increase to $7.25 after another twelve months. 

Tip credit under federal law

There is also a tip credit under federal law.  Employers of a "tipped employee" must pay a cash wage of at least $2.13 per hour if they claim a tip credit against their minimum wage obligation.  If an employee's tips combined with the employer's cash wage of at least $2.13 per hour do not equal the minimum hourly wage, the employer must make up the difference.  Certain other conditions must also be met.

Emplyers should remember that as between the state and federal minimum wage laws, they must pay the higher of the two minimum wage rates.

            If you have any further questions, please contact one of the experienced employment attorneys at Cooper & Walinski.