EMPLOYMENT LAW NEWS
Ohio Minimum Wage
By Kris Janisch
Published April 4, 2023
A bill to increase the Ohio minimum wage failed to gain footing in the legislature, and large employers there must continue to monitor the indexed rate each year.
Ohio minimum wage is kind of in the middle.
Across the U.S., jurisdictions are pushing for a $15 minimum wage. But Ohio minimum wage, while above the federal rate of $7.25, is sort of between those two numbers.
What is the minimum wage in Ohio?
As of March 2023, Ohio minimum wage for large employers is:
- $5.05 (tipped employees)
These Ohio minimum wage rates apply to employees of businesses with annual gross receipts of $372,000 or more per year.
Smaller companies in the state follow the federal minimum wage.
Minimum Wage Management. Simplified.
Ohio Minimum Wage Rate
In 2006, Ohio passed a minimum wage law through a ballot referendum.
It was somewhat unique in that it did not call for scheduled increases. Rather, annual increases were tied to inflation. The size of businesses to which the rate applies has also been adjusted. In 2021, it was companies with annual gross receipts of $342,000 or more per year. In 2023, that figure is $372,000.
(The new 2023 rate requires employers to display an updated labor law poster, as well.)
Also, there are no counties and cities in Ohio with their own minimum wage rates. Under the state law, “No political subdivision shall establish a minimum wage rate different from the wage rate required under this section.”
Ohio Minimum Wage Legislation
Meanwhile, lawmakers in 2021 introduced legislation to eventually bring its rate to $15. The bill called for scheduled $1 annual increases, eventually reaching the $15 threshold in 2025. Tipped employees would have received a bump, as well, with the rate for those employees being not less than half the standard rate.
According to one of the bill’s sponsors, increasing the minimum wage to $15 by 2025 would give 2 million Ohioans a raise. It would have also repealed the preemption on local units of government setting their own rates.
But the bill failed to gain footing in the legislature, and large employers in Ohio must continue to monitor the indexed rate each year.
Other Details on Minimum Wage in Ohio
Other aspects of Ohio minimum wage include:
- “Wage” also generally includes the reasonable cost to the employer of furnishing to an employee board, lodging, or other facilities, if the board, lodging, or other facilities are customarily furnished by the employer to the employees
- Employers must keep payment records for at least three years
- There is no state provision for a salary threshold for exempt employees
- Ohio does allow for a subminimum wage in certain situations
How Many States Have a $15 Minimum Wage?
Minimum Wage in the U.S.
The federal minimum wage hasn’t increased since 2009, prompting more jurisdictions to pass these laws.
And the ballot measure that pushed forward minimum wage in Ohio isn’t unique. On Election Day in 2022, there were several minimum wage initiatives put to voters, including:
- Two cities in California
- Portland, Maine
- Tukwila, Wash.
- Washington, D.C.
Find the 2022 minimum wage ballot results in a previous Employment Law News blog.
Meanwhile, though Ohio minimum wage has long been driven by indexing, more jurisdictions across the U.S. are beyond scheduled increases with new rates tied to the applicable Consumer Price Index. And jurisdictions sometimes announce updated rates only weeks before their effective date, creating additional challenges for employers that operate across the nation.
Minimum Wage Compliance Resources
Ohio minimum wage is among several jurisdictions with indexed rates. State officials in September 2022 announced the 2023 rates, so employers did have a few months at least to prepare for the update.
Of course, there is always the potential for new laws to impact the state’s minimum rate, and
As a reminder, effective Jan. 1, 2023, minimum wage rates for large employers in Ohio is:
- $5.05 (tipped employees)
This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.
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