In January 2022, the minimum wage in Ohio was $8.80 per hour for non-tipped employees and $4.40 per hour for tipped employees. Fast forward to January 2024, Ohio’s minimum wage increased to $10.45 per hour. The minimum base wage for tipped employees will increase to $5.25 per hour. What does that mean for your small business? In this blog we are going to tackle the current wage requirements in the state of Ohio.
Do Small Businesses have to comply with Minimum Wage Laws in Ohio?
Businesses with annual gross receipts of less than $385,000 per year do not have to pay the Ohio minimum wage. However, there are exceptions. In the state of Ohio, there are positions that are not required to meet minimum wage requirements. There are other requirements for these positions, such as a minimum weekly salary (which is far more than minimum wage.) Working with the team at ClarityHR can help small businesses with wage requirements. It is often confusing if it is not something that you are familiar with. For instance, here are some situations where workers can be exempt from minimum wage:
What Professions Are Exempt from Wage Laws?
- Commissioned salesmen
- Executives
- Administrative workers
- Computer professionals
- Employees of businesses that are family-owned and operated who are relatives of the owner are also exempt from Ohio minimum wage statutes
Why Did Minimum Wage Increase?
There are many reasons why states choose to increase minimum wages. Inflation is a major factor on why minimum wages are increased. The cost of living, however, can vary greatly depending on where your small business is located. For instance, in NYC the cost of living will be much higher than in rural Ohio. That is why states have the power to change the state requirements for minimum wage.
Factors for Increasing Wages:
- Standard of living: Higher wages can help workers afford the cost of living.
- Economic stability: Higher wages can help workers achieve economic stability.
- Worker productivity: Studies show that employees are more productive when they feel paid fairly.
- Consumer spending: Higher wages can lead to more consumer spending.
- Inflation: Adjusting the minimum wage for inflation helps protect the value of workers’ wages.
“Until 1968, the minimum wage not only kept pace with inflation, it rose in step with productivity growth. The logic is straightforward; we expect that wages in general will rise in step with productivity growth. For workers at the bottom to share in the overall improvement in society’s living standards, the minimum wage should also rise with productivity.”
– Center for Economic and Policy Research (CEPR
Who Enforces Wage Laws:
In the State of Ohio, the Bureau of Wage & Hour Administration administers and enforces Ohio’s Minimum Wage Laws. They must do so in accordance with Ohio revised code 4111 as well as, Ohio’s Prevailing Wage Law (ORC 4115). Again, it is important to note that these codes can be changed by the state legislature. It is important to monitor the code and update wages when the code is revised.
Do Minor Workers Have to Be Paid Minimum Wage in Ohio?
Every state has their own requirements for minors. In Ohio for example, businesses who gross less than $372,000 are only required to pay employees the federal minimum wage. The current federal minimum wage rate is $7.25 per hour as of January 2024. It is important to stay up to date on changes to the laws at both the federal and state levels. What is required today can be changed depending on new regulations. That is why working with a company like ClarityHR is a great option for small businesses. We will know when the changes are made.
Stay Compliant with ClarityHR
At ClarityHR we are here to help you stay up to date on all current compliance rules and regulations. Our team will help you make sure that your current payroll practices are up to date with the new minimum wage laws for 2024. If you have any questions or concerns, please do not hesitate to reach out to our team of HR experts. Contact us HERE.
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