Ohio Enacts Legislation Implementing
Minimum Wage Constitutional Amendment
As reported in the most recent
kwwlaborlaw.communicator, Ohio voters approved a constitutional
amendment in November that provides for an increase in the minimum wage
for most Ohio workers. Effective January 1, 2007, most employees now
must be paid a minimum wage of $6.85 per hour.
Throughout the month of December, there was
considerable wrangling in Columbus as the Ohio General Assembly worked
on legislation necessary to implement the constitutional amendment.
Points of contention included the types of employees who would be exempt
from the minimum wage requirement and the recordkeeping requirements
imposed on employers.
Ultimately, Am. Sub. H.B. 690 was passed by the
legislature on December 20. Governor Taft signed the legislation on
January 2, and the law goes into effect ninety days after it is filed
with the Secretary of State (i.e. on or about April 2, 2007). Note,
however, that the new minimum wage itself is already in effect as of
January 1, 2007.
Employees Subject
to the Minimum Wage.
A literal
reading of the constitutional amendment would certainly suggest that
very few employees would be exempt from the new minimum wage. The
constitutional amendment cited exclusions only for:
-
Tipped employees (who must be paid one-half the minimum wage so long as the employer can demonstrate that the employee receives
tips which, when combined with the wages paid by the employer, equals or
exceeds the minimum wage;
-
Family members working in a family owned and operated
business;
-
Employees under the age of 16;Employees with annual gross receipts of less than
$250,000; and
-
Individuals with mental and physical disabilities,
provided the state has issued a license to their employer authorizing
the payment of a sub-minimum wage.
However, Am. Sub. H.B. 690 expands upon the employees who are exempt
from the new minimum wage requirement. The legislation creates Ohio
Revised Code Section 4111.14, which provides that Ohio’s new minimum
wage does not apply to individuals who are exempt from the minimum wage
requirements under the federal Fair Labor Standards Act. Employees who
are exempt under the FLSA include:
-
Employees who fall within the FLSA’s “white collar”
exemptions (i.e. executive, administrative, professional, computer
professional, and outside sales);
-
Employees who work at seasonal camps or amusement or
recreational establishments;
-
Certain agricultural employees; and
-
Employers engaged in
fishing operations
Employers need to stay tuned because there is likely to be litigation
challenging the legislature’s effort to exclude these additional classes
of employees from the new state minimum wage requirement. Recordkeeping
Requirements The constitutional amendment approved by the voters also provides that Ohio
employers must “maintain a record of the name, address, occupation, pay
rate, hours worked for each day worked and each amount paid an employee
for a period of not less than three years following the last date the
employee was employed. The new legislation, in Ohio Revised Code
Section 4111.14(F)(3), also requires that these records by kept “for
three years from the date the hours were worked by the employee and for
three years after the date the employee’s employment ends.” The record
of hours worked each day does not need to reflect the time of day the
employee begins and ends work. Rather, the employer must only record
the total hours worked each day in whatever increments the employer uses
for its payroll purposes.
In a
significant departure from a literal reading of the constitutional
amendment, the implementing legislation expressly provides that an
employer is not required to keep a record of hours worked
for an employee for whom the employer is not currently required to keep
those records under the federal wage hour law (e.g. employees who
qualify for the “white collar” exemptions). It remains to be seen
whether this statutory exemption from the recordkeeping requirement will
be challenged through litigation.
Providing Records
To An Employee.
The law
does not mandate the format in which records must be kept (e.g. paper or
electronic). However, it does require that the records be kept in such
a way that they can be reasonably reviewed by the employee or a person
acting on the employee’s behalf. Upon request, an employer must provide
such information without charge to the employee or a person acting on
the employee’s behalf. A “person acting on the employee’s behalf” is
limited to the employee’s certified or legally recognized collective
bargaining representative, the employee’s attorney, or the employee’s
parent, guardian, or legal custodian. Ordinarily, the records must be
produced within thirty days. Under the implementing legislation, the
employer is permitted to require a written and notarized request for the
information. An employer is only required to give an employee his or
her own information, not the information that pertains to other
employees.
The new
law also requires an employer to provide all new employees at the time
of hire with the employer’s name, address, telephone number, and other
contact information. An employer must update this contact information
within sixty days of any change in this information.
Ohio
employers are in a “no man’s land” between January 1 and the effective
date of the legislation. Moreover, even after the effective date of the
Am. Sub. H.B. 690, there will be some uncertainty until the
discrepancies between the language of the constitutional amendment and
the implementing legislation are resolved through litigation. In the
meantime, employers should consult with employment counsel regarding
specific questions involving the application of Ohio’s new minimum wage
constitutional amendment and its implementing legislation.
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