Effective January 1, 2014, Ohio’s minimum wage is increasing 10 cents to $7.95 per hour. The minimum hourly wage for non-tipped employees is linked to inflation under a state constitutional amendment Ohio voters approved in 2006. The minimum wage uses the Consumer Price Index to adjust for inflation, as tracked from August to August every 12 months. Ohio was one of 13 states that raised its minimum wage at the start of the new year.

Twelve other states (Arizona, California, Connecticut, Florida, Missouri, Montana, New Jersey, New York, Oregon, Rhode Island, Vermont and Washington) also increased their state minimum wages.  A new bill, the Fair Minimum Wage Act of 2013, was introduced in Congress in March 2013 and supported by President Obama, would raise the federal minimum wage to $10.10 per hour in three annual steps; however, the current federal minimum wage required by the Fair Labor Standards Act remains at $7.25 per hour. It is likely that increasing the federal minimum wage remains a hot issue for 2014.  Employers in states with minimum wage provisions that differ from the federal law must pay the higher of the two rates. 

For business owners, the increased wages mean an increase in payroll, but also serve as a reminder that compliance with minimum wage laws is necessary as fines, liquidated damages, attorneys’ fees, and unpaid wages can create significant liability. The beginning of the year provides an opportunity for employers to review their minimum wage and overtime policies with legal counsel to ensure compliance.  The attorneys at Mowery Youell & Galeano, Ltd. regularly consult with both employees and employers regarding minimum wage and overtime issues.

One option for employers to consider is a self-audit.  This process, when conducted in conjunction with the Department of Labor Wage and Hour Division, can provide for the payment of back wages to employees without additional fines.

By: Justin A. Morocco