Employment and Labor Relations Lawyer & Attorney : Porter Wright's Employer Law Report : Employment Litigation, Non-Compete, Trade Secrets

Effective January 1, 2009, Ohio’s minimum wage will increase to $7.30/hour generally and $3.65/hour for tipped employees (plus tips). 

The state minimum wage will briefly change to $6.55/hour for employers grossing $267,000 or less per year and employees who are 14 or 15 years of age. On July 24, 2009, pursuant to an increase in the federal minimum wage, the Ohio minimum wage increases to $7.25 per hour those employees whose employers gross $267,000 or less and 14 & 15 year olds.

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A recent wage-and-hour case illustrates the effect payroll deductions can have on minimum wage compliance. In Rivera v. Brickman Group, Ltd., No. 05-1518 (E.D. Pa. Jan. 7, 2008), a company brought Guatemalan and Mexican workers to the United States for seasonal employment under H-2B visas. Although the workers were paid amounts that appeared to be above the minimum wage, the company failed to take into account certain travel expenses and other employment-related costs incurred by the workers – expenses that reduced the workers’ earnings below minimum wage levels.

In particular, the court found that transportation expenses, costs involved in obtaining visas, and fees charged by the company’s recruiters were incurred by the workers primarily for the company’s benefit. Therefore, the company violated the Fair Labor Standards Act because the deductions brought the employees’ earnings below the minimum wage. In reaching its decision, the court rejected the company’s argument that the Immigration and Nationality Act and the Portal-to-Portal Act supersede the FLSA with regard to H-2B workers’ wages and do not require employers to bear the travel expenses of such employees. The company has not yet announced whether it will appeal the decision.

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Ohio employers should be aware that the minimum wage is about to increase yet again. The Ohio Department of Commerce has announced that the state’s minimum wage will increase to $7.00 per hour on January 1, 2008 – a 15 cent increase over the 2007 minimum wage. The minimum wage for tipped employees will rise from $3.43 to $3.50 per hour, so long as employees earn a total of $7.00 per hour once wages and tips are combined. 

These new minimum wages apply to employees over 16 years of age whose employers gross more than $255,000 annually. For employees younger than 16 and those whose employers gross less than $255,000 annually, the federal minimum wage of $5.85 applies – but not for long. The federal minimum wage will increase to $6.55 on July 24, 2008.

A copy of the Department of Commerce’s 2008 Minimum Wage poster can be found here.

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