Ohio Appeals Court Orders Double Damages and Attorneys Fees for Successful Minimum Wage Claim

Yesterday, the Cuyahoga County Court of Appeals reversed the denial of liquidated double damages and attorneys’ fees to two successful plaintiffs who sued for denial of both minimum wage and overtime compensation under Ohio law.  Porter v. AJ Automotive Group, Inc., 2015-Ohio-3769.   The Court found that the employer bore the burden of proving that it was exempt from Ohio’s wage laws and it had not argued that it was exempt.  Therefore, the plaintiffs were entitled to liquidated damages and attorneys’ fees under their minimum wage claim under Ohio Revised Code § 4113.14 and Ohio Constitution Article 34a and to their unpaid overtime compensation under §4113.03.

The plaintiffs worked as car washers for the defendant employer.  They sued for unpaid minimum wages and overtime compensation under state and federal law.  The employer argued that they were tipped employees and that it was not subject to the Fair Labor Standards Act because it did not meet the sales volume or enterprise test.   The trial court concluded that the defendant was not an “employer” under federal or state wage laws, but used its equitable power to award the plaintiffs unpaid minimum wages and overtime compensation.  However, it denied them liquidated damages and attorneys’ fees. They appealed.

On appeal, there was no dispute about the amount of wage liability or applicability of the FLSA.   The trial court had concluded that the plaintiffs failed to prove that the defendant was a statutory employer under §4113.02(D), which is the overtime compensation statute and includes everyone as an employer, except businesses with gross annual sales of less than $150,000.   However, the Court agreed with the Franklin County Court of Appeals that the employer – not the plaintiff – bears the burden of proving its exemption from the statute by proving its sales meet the annual threshold.   Moreover, the defendant had never raised or argued any defense that it was not an employer under Ohio law.   Finally, the minimum wage statute at §4113.14 incorporates by reference the FLSA definition of employer, which is “’any person acting directly or indirectly in the interest of an employer in relation to an employee * * *.’ 29 U.S.C. 203(d).”

 

Accordingly, the Court found that the plaintiffs were entitled to the full remedies of ORC §4114.14 and §34a, which includes liquidated damages of twice the amount of unpaid minimum wages and attorneys’ fees.  (Ohio’s overtime compensation does not provide for liquidated damages).  

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Happy New Year and New Minimum Wage

With the holiday season coming to an end, it will soon be a new year and a new minimum wage for employees in Ohio.   As of Thursday, the minimum wage for Ohio employees will rise to $8.10/hour.   According to §34a of Article II of the Ohio Constitution and Ohio Revised Code §4111.14, the FLSA governs who is considered to be an “employer” subject to Ohio’s minimum wage law (except that §34a also explicitly covers the state and all political subdivisions as well).   The official 2015 Ohio Minimum Wage poster – which should be hung conspicuously in all Ohio workplaces (that are subject to the law under Ohio Revised Code §4111.09) -- indicates that employers which gross less than $297,000 are not subject to Ohio’s minimum wage and can pay only the $7.25 federal minimum wage.    Tipped employees (i.e., those who customarily receive more than $30/month in tips) are entitled to only $4.05/hour.  Individuals who are not covered – or who are exempted -- by the federal and state minimum wage laws get paid only what they negotiate by contract.

Determining who is covered and who is exempted by the minimum wage laws sometimes requires a law degree and great patience to dig through ad hoc amendments to statutes and regulations.  Ohio Revised Code §4111.14 summarizes §34a in more detail, but still incorporates by broad reference the coverage provisions of the FLSA.  Section 203 of the FLSA provides that an “employer” ” includes any person acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency, but does not include any labor organization (other than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization“ and an “employee means any individual employed by an employer” with certain exceptions.   Section 206, however, which generally governs the federal minimum wage requirements, provides that employers are only required to pay the minimum wage to employees who are “engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce.”  There are additional exceptions to this rule as well (as well as other ad hoc amendments that are beyond the scope of this posting).  

Earlier this year, an Ohio Court of Appeals held that Ohio Revised Code §4111.14(B)(1) [which incorporated the FLSA exemptions into Ohio law] was an unconstitutional attempt by the General Assembly to restrict §34a of the Ohio Constitution and declared it “invalid.”  Haight v. Cheap Escape Co., No. 2014-Ohio-2447.   This case is currently on appeal at the Ohio Supreme Court at Case No. 2014-1241. 
 

Unless an employer can prove that its enterprise – or a particular employee -- is exempt from the minimum wage laws, it is prudent to assume that the employer and/or the employee are covered.   In the last quarter of 2012, a Central Ohio employer found itself liable for $15,996.52 in unpaid minimum wages, $581.40 in unpaid overtime, and $33,155.84 in damages.  Goodman v. Cleland, 2012-Ohio-5044.  The court rejected the employer’s attempt on appeal to show that it was not subject to the overtime wage provisions.  Instead, the court treated the not-an-employer-under-the-statute argument as an affirmative defense – with the burden of proof on the employer.  (This case is a little confusing because the appellate court discusses at ¶ 23 the trial court’s refusal to consider the argument in a motion to dismiss because it was not specifically designated as an affirmative defense in the employer’s answer to the complaint even though the defendant denied being an employer under the statute.  Nonetheless, the appellate court then finds in the same paragraph that the employer waived the argument by failing to raise it again at the summary judgment stage). 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio’s Minimum Wage Increases for 2012

On Sunday, Ohio’s minimum wage (for non-tipped employees) increased to $7.70 per hour – which is more than the federal minimum wage of $7.25/hour. As described by the Ohio Department of Commerce:

“Non-Tipped Employees” includes any employee who does not engage in an occupation in which he/she customarily and regularly receives more than thirty dollars ($30.00) per month in tips from patrons or others.
“Employers” who gross under $283,000.00 shall pay their employees no less than the current Federal Minimum wage rate.
“Employees” under the age of 16 shall be paid no less than the current federal minimum wage rate.
“Current Federal Minimum Wage” is $7.25 per hour.

Tipped employees are entitled to $3.85/hour plus tips. According to the DOC:

“Tipped Employees” includes any employee who engages in an occupation in which he/she customarily and regularly receives more than thirty dollars ($30.00) per month in tips from patrons or others. The tips are proven if indicated by the employee’s declaration for the purposes of the federal insurance contribution act. Including when tips are added to the employee’s wage, his/her hourly pay cannot be less than the regular minimum wage of $7.70 prescribed by law.

Other employees who are exempt from Ohio’s minimum wage include the following:

1. Any individual employed by the United States;
2. Any individual employed as a baby-sitter in the employer’s home, or a live-in companion to a sick, convalescing, or elderly person whose principal duties do not include housekeeping;
3. Any individual employed as an outside salesman compensated by commissions or in a bona fide executive, administrative, or professional capacity, or computer professionals;
4. Any individual who volunteers to perform services for a public agency which is a State, a political subdivision of a State, or an interstate government agency, if
(i) the individual receives no compensation or is paid expenses, reasonable benefits, or a nominal fee to perform the services for which the individual volunteered; and
(ii) such services are not the same type of services which the individual is employed to perform for such public agency;
5. Any individual who works or provides personal services of a charitable nature in a hospital or health institution for which compensation is not sought or contemplated;
6. Any individual in the employ of a camp or recreational area for children under eighteen years of age and owned and operated by a non-profit organization or group of organizations.
7. Employees of a solely family owned and operated business who are family members of an owner.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney

Ohio's Minimum Wage to Increase to $7/hour on January 1

The Ohio Department of Commerce Division of Labor & Worker Safety has announced that effective January 1, 2008 Ohio’s minimum wage will increase to $7.00/hour for covered employees and $3.50/hour for tipped employees (plus tips). Currently, the federal minimum wage is $5.85/hour. On July 24, 2008 the federal minimum wage will increase to $6.55/hour.

Ohio employers are required to post a notice of the new minimum wage, which can be printed for free from: http://www.com.state.oh.us/laws/pub/MinimumWagePoster2008.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with an attorney.