HB 34: Minimum Wage Increase

Subject: Proposed amendments to Ohio Revised Code sections related to minimum wage, aiming to increase the state minimum wage.

Summary:

Ohio House Bill 34 proposes to amend several sections of the Ohio Revised Code (specifically 4111.02, 4111.05, 4111.09, and 4111.14) and repeal section 4111.07. The primary objective of this bill is to incrementally increase the state minimum wage to $15.00 per hour by January 1, 2030, with subsequent annual adjustments based on Section 34a of Article II of the Ohio Constitution. The bill also clarifies definitions related to employers, employees, and independent contractors, largely aligning with the Fair Labor Standards Act (FLSA). Furthermore, it outlines requirements for employer record-keeping, employee access to pay information, complaint procedures, and enforcement mechanisms related to minimum wage.

Main Themes and Important Ideas/Facts:

1. Increase in State Minimum Wage: The central theme of the bill is the phased increase of the Ohio state minimum wage:

• January 1, 2026, to December 31, 2026: $11.00 per hour or the wage rate calculated under Section 34a of Article II, Ohio Constitution, whichever is greater.
• January 1, 2027, to December 31, 2027: $12.00 per hour.
• January 1, 2028, to December 31, 2028: $13.00 per hour.
• January 1, 2029, to December 31, 2029: $14.00 per hour.
• Beginning January 1, 2030: $15.00 per hour.
• Post-September 30, 2030: The director of commerce will annually adjust the $15.00 wage rate based on Section 34a of Article II of the Ohio Constitution, effective the following January 1st.

1. This incremental approach aims to gradually raise the minimum wage over a five-year period.
2. Consistency with Ohio Constitution: The bill explicitly states its intention to implement Section 34a of Article II of the Ohio Constitution, which deals with the state minimum wage. Section 4111.14(A) notes that the General Assembly finds the purpose of Section 34a is to:

• Ensure employees are paid the required wage rate.
• Ensure employers maintain relevant records.
• Ensure employees can enforce their right to the minimum wage.
• Protect employee pay and personal information privacy.

1. Federal Alignment and Definitions: The bill adopts definitions for “employer,” “employee,” “employ,” “person,” and “independent contractor” as defined in the “Fair Labor Standards Act of 1938” (29 U.S.C. 203). Section 4111.14(B) states:
2. “In construing the meaning of these terms, due consideration and great weight shall be given to the United States department of labor’s and federal courts’ interpretations of those terms under the Fair Labor Standards Act and its regulations.”
3. This aims for consistency with federal labor law in defining these key terms. The bill also provides specific exclusions from the definition of “employee,” such as certain volunteers and, under specific conditions, individuals operating vehicles for motor carriers as independent contractors.
4. Director of Commerce Authority: The bill grants the director of commerce the authority to:

• Adopt rules to carry out the purposes of sections 4111.01 to 4111.17 of the Revised Code (Section 4111.05). These rules can cover aspects like apprentices, bonuses, deductions for provided facilities, and the inclusion of gratuities in wages.
• Approve and make available summaries of minimum wage sections and applicable rules, updating them at least annually to reflect changes in the minimum wage rate (Section 4111.09).

1. Employer Responsibilities: The bill outlines several key responsibilities for employers:

• Paying the Minimum Wage: Adhering to the escalating minimum wage schedule outlined in Section 4111.02(A).
• Providing Contact Information at Hire: Employers must provide their name, address, telephone number, and other contact information (including website, email, etc.) to employees at the time of hire and update this information within sixty business days of any change (Section 4111.14(E)).
• Maintaining Records: Employers must maintain records for at least three years following the last date of employment, including the employee’s name, address, occupation, pay rate, hours worked each day, and each amount paid (Section 4111.14(F)).
• Providing Access to Information: Employers must provide “such information” (name, address, occupation, pay rate, hours worked, and amount paid for the requesting employee) without charge to an employee or their authorized representative within thirty business days of a request, unless an alternative timeframe is agreed upon or a hardship exists (Section 4111.14(G)). Employers can require a written, signed, and notarized request.

1. Employee Rights and Complaint Procedures: The bill establishes mechanisms for employees to address minimum wage violations:

• Filing Complaints: Employees, individuals acting on their behalf (with written and notarized authorization), and other interested parties can file complaints with the state for violations (Section 4111.14(H)). The employee’s name will be kept confidential unless disclosure is necessary and the employee consents.
• State Investigation: The state (defined as the director of commerce in Section 4111.14(N)) will promptly investigate and resolve complaints and may also initiate investigations independently (Section 4111.14(H) and (I)). Investigation records are confidential.
• Legal Action: The attorney general and/or an employee (or those acting on their behalf, or similarly situated employees with written consent) can bring civil actions for equitable and monetary relief in any court of competent jurisdiction within three years of the violation or one year after notification of final state disposition, whichever is later (Section 4111.14(K)).

1. Remedies and Penalties: The bill specifies the calculation of damages for minimum wage violations:
2. “damages shall be calculated as an additional two times the amount of the back wages and in the case of a violation of an anti-retaliation provision an amount set by the state or court sufficient to compensate the employee and deter future violations, but not less than one hundred fifty dollars for each day that the violation continued.” (Section 4111.14(J))
3. The “$150 minimum penalty” specifically applies to anti-retaliation violations.
4. No Local Minimum Wage Variations: The bill explicitly prohibits political subdivisions from establishing a minimum wage rate different from the state-mandated rate (Section 4111.02(C)).
5. Repeal of Section 4111.07: The bill proposes to repeal section 4111.07 of the Revised Code. The content of this section in the current Ohio Revised Code relates to the definition of “wage board” and its duties regarding minimum fair wage standards for specific occupations. Its repeal suggests a move away from industry-specific wage boards in favor of a statewide minimum wage.
6. Immunity for Providing Information: Employers who provide the required pay and work information to employees or their representatives in response to a request are granted immunity from civil liability for injury, death, or loss resulting from providing that information and are not subject to certain provisions of Ohio’s privacy laws (Chapters 1347 and 1349) in this context (Section 4111.14(M)).

Potential Implications:

• Increased Labor Costs: Businesses, particularly those with a significant number of low-wage employees, will face increasing labor costs over the next several years.
• Economic Impact: The gradual increase could have various economic impacts, including potential price increases, adjustments in hiring practices, and effects on consumer spending.
• Worker Earnings: Low-wage workers will see a significant increase in their minimum hourly earnings over time.
• Enforcement and Compliance: The bill strengthens the framework for enforcing minimum wage laws and provides clearer guidelines for employer record-keeping and employee access to information.

Next Steps:

This bill has been introduced in the Ohio House of Representatives and will now proceed through the legislative process, which may include committee hearings, amendments, and votes in both the House and the Senate before potentially being signed into law by the Governor.