In the 2006 election, Ohio voters approved the Fair Minimum Wage Amendment to raise the minimum wage for Ohio workers. In one of its final legislative acts in 2006, the state legislature enacted H.B. 690 to ensure that current wage laws reflected the provisions of the amendment. The law went into effect on January 1, 2007, so it is important for employers to understand what is required by the act. The following is an overview of the act’s provisions, followed by some recommendations for compliance.
The Minimum Wage Provisions of H.B. 690
Beginning on January 1, 2007, Ohio’s new minimum wage rose to $6.85 per hour. In addition, on the first day of each year thereafter, the minimum wage will increase by the rate of inflation, according to the consumer price index. There are some sub-minimum-wage provisions in the new law:
- Employees under 16 years of age and employees of businesses with annual gross receipts of $250,000 or less may be paid the federal minimum wage of $5.15 per hour, rather than the new Ohio rate.
- Tipped employees must be paid 50 percent of the state minimum wage, or $3.43 per hour, provided that they are guaranteed at least $6.85 per hour in total earnings.
- The act also permits the state to issue licenses to employers, allowing for the payment of less than the minimum wage to employees with physical or mental disabilities that would otherwise adversely affect their opportunity for employment. The procedure to obtain such a license has not been identified and will likely be addressed by the Ohio Department of Commerce later this year.
The act primarily adopts the federal Fair Labor Standards Act’s (FLSA) definitions of “employer” and “employee.” The requirements in the new act do not apply to:
- Individuals who are exempt from overtime under Section 213 of the FLSA, including outside salespersons, bona fide executives, administrative employees, or professional employees as determined by federal law;
- Employees of solely family-owned businesses who are related to an owner;
- Individuals employed on a casual basis in or around an employer’s property or an individual’s residence;
- Any other individuals who are excluded from the definition of “employee” under Section 203(e) of the FLSA.
The new statute also includes recordkeeping provisions. Employers are required to keep and maintain certain records for each of their employees. Specifically, employers must keep records of the names, addresses, occupations, pay rates, and hours worked each day and week for each nonexempt employee. These records must be kept for three years after the date the hours were worked and for three years after the employee leaves his or her employment.
While employers also must keep records for employees who are exempt from overtime, the requirements are less stringent and are similar to current law. Employers are not required to maintain records of hours worked for employees who are exempt from overtime, employees covered by the exceptions above, employees of the United States, babysitters, in-home caretakers, newspaper deliverers, volunteers at hospitals or health care institutions, police or firefighters, students employed seasonally or part-time by the state, employees of a camp or recreational area for children under 18, and employees of the House or Senate. Employers are required, however, to maintain records of even exempt employees’ names, addresses, occupations, and rates of pay. This should be nothing new to Ohio employers, who likely preserve this information now for both employment and tax purposes.
Record Disclosure Requirements
A significant change ushered in by the new law is the requirement that employers provide the above records to an employee or person acting on behalf of an employee. Upon the request of an employee or a representative of an employee, an employer must provide requested records, without charge, within 30 days of the request. The person requesting the records, if not the employee himself, may be the employee’s union representative, attorney, parent, guardian, or custodian. Employers may require that requests be in writing, signed by the employee, and notarized, and may also require that all requests specify the particular records sought. The employer is under no obligation to – and should not – provide records to an employee that concern another employee.
Disclosure of Employer’s Contact Information
Under the new law, employers are required to provide all employees with the employer’s name, address, telephone number, and “other contact information.” The provision states that “other contact information” may include, where applicable, the employer’s internet address, e-mail address, fax number, or the name, address, and telephone number of the employer’s statutory agent. This required information must be provided to all employees at the time of their hiring and must be updated within 60 days following any changes in the information.
The act retains the current obligation of employers to post a summary of Ohio wage requirements in a conspicuous location. Because many of the requirements have changed, the Director of Commerce is required by the act to make a revised summary available to employers on the Department of Commerce’s website and to update the summary annually.
Enforcement and Damages
The act significantly changes the manner in which the minimum wage is enforced in Ohio. Under the new law, an employee, a person acting on behalf of an employee or employees, or any other interested party may file a complaint alleging a violation of any of the minimum wage provisions. “Interested parties” must allege to have been injured by the violation to have standing. Additionally, the state may investigate any employer’s compliance with the requirements.
During such investigations, employers must make available to the state any records related to the investigation or required for enforcement. If a violation is found to have occurred, damages include back wages and an additional two times the amount of back wages. Further, if an employer retaliates against an employee for bringing or threatening suit under this act, then the employer may be required to pay additional damages of at least $150 per day for each day the violation continued.
What Should Employers Do?
Keep in mind that these requirements went into effect on January 1, 2007, so it is imperative that employers are in compliance. The following are several recommended actions for employers to take in order to comply with the act:
- Make sure that, as of January 1, 2007, all employees at or over the age of 16 are paid at least $6.85 per hour. Adjust pay ranges accordingly and pay attention toward the end of the year, when the minimum rate for 2008 will be announced.
- Verify that the required records are being kept for the required amount of time. The act does not specify any particular form or method by which employers are to create or store the records, but all of the required information must be retained. Remember that records of hours worked are not required for exempt employees.
- Comply with requests for records submitted by employees or their representatives, and do so within 30 days. It is recommended that employers designate a single person or department to receive all such requests. That person or department may require that requests be signed by the employee and notarized, and may also require that the requests specify what records are being sought. Be sure not to provide an employee with records that concern another employee.
- Make sure that when every employee is hired, they are provided a document listing the employer’s name, address, and telephone number. If applicable, also include the employer’s internet address, email address, fax number, and the name, address, and telephone number of the employer’s statutory agent. If current employees have not received this information, provide it to them as well. Remember to reissue the information to all employees whenever the information changes.
- Visit the Ohio Department of Commerce’s website and download the summary of Ohio’s wage requirements. Make sure to post this summary in a conspicuous location at all facilities.