Compliance Watch:
Penalties for Breaking Ohio Labor Laws

April 11th 2024

Operating a business comes with a multitude of responsibilities, and one crucial aspect is complying with labor laws. In Ohio, like in any other state, businesses must adhere to federal and state laws to ensure fair treatment of employees and maintain a harmonious work environment.

These laws encompass various facets of employment, including minimum wage, overtime, worker’s compensation, discrimination, and safety regulations. And businesses that fail to comply with these laws not only risk hefty penalties and legal consequences but also jeopardize their reputation and long-term viability. Unfortunately, not all businesses are aware of this.

This article aims to shed light on the subject, emphasizing the importance of proactively addressing compliance issues. By delving into specific violations and their consequences, businesses can learn to take the necessary measures that won’t only ensure compliance but also safeguard their operations, reputation, and workforce.

This Article Covers

Most Common Labor Law Violations in Ohio
Penalties for Breaking Ohio Labor Laws
How You Can Avoid Violating Ohio Labor Laws

Most Common Labor Law Violations in Ohio

In Ohio, several labor law violations are unfortunately still prevalent, undermining the rights and well-being of workers. The most common labor law violations in Ohio encompass various areas, including:

  • Failure to pay minimum wage: The current minimum wage in Ohio is set at $10.45 an hour for non-tipped employees and $5.25 per hour for tipped employees. However, this rate only applies to businesses that make over $385,000 in yearly sales. Lower-earning businesses can pay the federal minimum wage of $7.25 per hour. Violations can occur when employers intentionally pay below the minimum wage or misclassify employees as exempt. As per a recent analysis conducted by Policy Matters Ohio, around 213,000 Ohio residents experience wage theft each year due to minimum wage violations.
  • Overtime violations: Violations related to overtime pay occur when employers deny eligible employees their entitled overtime wages. This can involve miscalculating overtime hours, misclassifying employees, or outright refusing to pay overtime altogether.
  • Misclassification of employees: Employers may misclassify employees as independent contractors to avoid providing benefits, paying taxes, or complying with certain labor laws. This misclassification deprives workers of important protections such as minimum wage, overtime pay, and unemployment benefits. A study from the attorney general of Ohio back in 2009 revealed that a minimum of 459,000 employees in Ohio may have been misclassified.
  • Retaliation against whistleblowers: Ohio law prohibits employers from retaliating against employees who report workplace violations or engage in protected activities, such as filing complaints or cooperating with a government investigation. Retaliation can take various forms, including termination, demotion, reduction in hours, or hostile work environments.
  • Failure to ensure workplace safety: Employers are legally obligated to provide a safe and healthy working environment for their employees. Violations in this area can include failing to address safety hazards, not providing proper safety training, or neglecting to maintain necessary safety equipment. These violations can lead to accidents, injuries, and potential legal consequences.

A wooden gavel and block. Photo by Tingey Injury Law Firm on Unsplash

Penalties for Breaking Ohio Labor Laws

Ohio Minimum Wage Law

In Ohio, the minimum wage is currently at $10.45 per hour for businesses with annual sales over $342,000 and $7.25 per hour for lower-earning businesses. There are, however, several exceptions to the minimum wage law, this includes:

  • Tipped employees, such as waitstaff and bartenders. These employees can be paid a reduced hourly rate provided that their total earnings, including tips, meet or exceed the regular minimum wage. Employers are required to make up the difference if it falls short.
  • Employees under 18. Ohio employers may pay 18-year-olds and minors the youth minimum wage of $4.25 but only for the first 90 days of employment.
  • Full-time students. Certain employers, like retail or service stores, can pay full-time students no less than 85% of the current minimum wage, according to FLSA.
  • Disabled individuals whose challenges interfere with their earning capacity. For these individuals, employers may apply for a license to pay disabled individuals less than the current minimum wage at a rate determined by the Ohio Department of Commerce Director.
Penalty for Violation

Non-compliance with the minimum wage regulation set by Ohio Rev. Code 4111 and failing to pay the minimum wage can lead to costly penalties. Under Section 4111.99(B), paying less than the minimum wage is a third-degree misdemeanor. Penalties include a fine of up to $500 and a maximum jail term of 60 days. And each week of non-payment is treated as a separate offense.

FLSA Overtime Laws 

Ohio follows regulations from the Fair Labors Standards Act regarding overtime requirements and compensation. It is important to note that any work exceeding 40 hours in a workweek is considered overtime and must be compensated at a rate of 1.5 times the regular pay, with exceptions not included.

Penalty for Violation

Employers who intentionally or repeatedly disregard the minimum wage or overtime pay obligations may face a civil money penalty of up to $1,000 per violation. Willful violations of the FLSA can lead to criminal prosecution and fines of up to $10,000. Subsequent convictions may result in imprisonment.

Ohio OSHA Law

The Ohio Occupational Safety and Health Act aims to ensure safe and healthy working conditions for employees across the state. It conducts inspections, investigates complaints, and provides education and training to employers and employees regarding occupational safety and health.

Employers in Ohio are required to comply with the safety and health standards established by Ohio OSHA, which cover various aspects such as hazard communication, fall protection, machine guarding, and respiratory protection, among others.

Penalty for Violation

Employers who knowingly or repeatedly disregard the regulations set by OSHA may face civil penalties. Such penalties can vary up to $70,000 per violation, with a minimum of $5,000 for each willful violation.

In some cases where violation leads to severe injury or death, the penalties can be far steeper. A vinyl tile manufacturer in Ohio was fined a whopping $1,232,705 by Department of Labor’s OSHA after a worker was severely injured in a machine accident on April 28, 2022. It was the 7th injury case for the manufacturer in 5 years.

Family and Medical Leave Act (FMLA)

Ohio workers who face a medical emergency or need to support a family member in a similar situation may be eligible for up to 12 weeks of unpaid leave under FMLA. This applies to circumstances such as childbirth, adoption or foster care, and personal health conditions that prevent them from working or taking care of a relative with a severe health condition. To qualify for this benefit, employees must have worked for their employer for at least 12 months and completed 1,250 hours during that period.

Penalty for Violation

The Wage and Hour Division is responsible for administering and enforcing the FMLA for private, state, and local government employees, as well as certain federal employees. If violations cannot be resolved satisfactorily, the US Department of Labor may take legal action to ensure compliance. If the court rules in favor of the complainant, the employer may be required to allow the complainant to take FMLA leave and provide monetary damages, including attorney fees and court costs.

Whistleblower Protection Laws

All Ohio employees are protected by state and federal whistleblower laws if they report:

  • A criminal offense with potential immediate physical harm to people or a threat to public safety or health,
  • A felony, or
  • An improper solicitation for a contribution

There are also other requirements for whistleblowers to meet. They will need to first inform their supervisor, either in writing or verbally, about the violation. If no action is taken to address the issue, they can escalate the matter to officials such as the prosecuting attorney or inspector general. In cases of immediate danger or criminal offenses, the employee can directly contact public authorities.

Penalty for Violation

In Ohio, the penalty for violating the Whistleblower Protection Act can vary depending on the specific circumstances of the case. If an employer is found to have retaliated against an employee for whistleblowing, the employee may be entitled to various remedies and damages. These can include reinstatement, compensation for lost wages and benefits, attorney’s fees, and other relevant damages.

Ohio Recordkeeping Laws

In Ohio, it is mandatory to maintain employee records for at least five years from the termination date or last entry. These records should include the employee’s name, address, occupation, pay rate, amount paid per pay period, and daily and weekly working hours (ORC 4111.08). Similarly, the Fair Labor Standards Act (FLSA) also requires a 3-year recordkeeping period. However, certain agencies may request records for longer durations. For instance, the Bureau of Workers’ Compensation (BWC) can review records dating back 5 years (ORC 4123.24).

Interestingly, Ohio law mandates employers to provide employees (or their representatives) with copies of their payroll records upon request. Failure to maintain records or provide copies upon request is considered a violation of the law, and employers can be subject to legal action for such non-compliance.

Penalty for Violation

Non-compliance with the FLSA can result in fines starting from $2,050 per violation per employee. Intentional violations can lead to criminal prosecution, with fines of up to $10,000 for the violator. A second conviction may result in imprisonment.

The Department of Labor (DOL), on the other hand, enforces key worker protection statutes using civil monetary penalties for breaking Ohio Labor Laws. The maximum penalties range from $1,084 for recordkeeping and administrative violations.

Child Labor Laws

Minors in Ohio must provide age and schooling certificates, along with a work permit from their school, to their employer. A written agreement outlining wage rate and payment details must also be signed by both the employer and employee before starting work.

There are, however, hazardous occupations that minors should not be working in. This includes:

  • Construction
  • Explosives
  • Driving
  • Power machinery operation
  • Work in confined spaces like silos, sewers, and boiler rooms

For a complete list of restrictions for minor workers, you can refer to the Ohio Minor Labor Laws.

Penalty for Violation

The Fair Labor Standards Act (FLSA) establishes federal child labor rules, which are enforced by the Wage & Hour Division of the US Department of Labor.

Intentional violations can lead to criminal prosecution, with fines of up to $10,000. Repeat or willful violations of minimum wage requirements may result in a civil money penalty of up to $10,000 per affected employee. The penalty for this can increase if the violation results in injury or death.

In the case of a lathe mill in Dundee, Ohio, employers were fined $22,000 for allowing a 15-year-old to operate a sawmill. This led the worker to suffer injury when he became entangled in the gears of a powered wood processing machine.

Ban-the-Box Law

Ohio implemented the “Ban-the-box” law in 2017 to promote fair hiring practices. This law is part of a nationwide effort to eliminate criminal background inquiries on job applications and provide new opportunities for individuals with past convictions. Its goal is to ensure equal opportunities during the hiring process.

Penalty for Violation

In Ohio, the penalty for violating the ban-the-box law can vary depending on the case circumstances and the severity of the violation. Typically, penalties may include fines or other forms of legal consequences.

Independent Contractor Status Under FLSA

Misclassifying employees is a widespread problem in the US, particularly in Ohio. This illegal practice allows employers to evade mandatory taxes and violates federal employee protections. This is why in January 2021, the Department of Labor (DOL) introduced a final rule called “Independent Contractor Status Under the FLSA.” This rule focuses on two main factors to determine whether a worker is an independent contractor: the worker’s control over their own work and their potential for profit or loss.

Put simply; an independent contractor provides goods or services to another individual or business. This is often under a contract’s terms that dictate the work outcome. However, the contractor retains control over how they provide the good or service. Independent contractors treat employers more like clients or customers, often have multiple clients, and are self-employed.

Penalty for Violation

Misclassifying employees can lead to various repercussions for employers. Each violation can result in fines of up to $1000. Employers may also face action from the IRS and collective civil suits brought by groups of employees who were denied overtime pay.

How You Can Avoid Violating Ohio Labor Laws

To save yourself from the penalties for breaking Ohio Labor Laws mentioned above, it is essential to understand and comply with the regulations that govern employment practices. Here are some important steps you can take to ensure compliance:

Tip #1 Familiarize yourself with the relevant laws

As a business operating in Ohio, you need to have some knowledge of the legal landscape. Take the time to research and understand Ohio labor laws, including state-specific regulations and federal laws such as the Fair Labor Standards Act (FLSA). It’s also important to stay updated on any changes to these laws so you can make necessary changes to company policies.

Tip #2 Maintain accurate employee records

Keep detailed records of employee information, including names, addresses, wages, hours worked, and other relevant data. Ohio law requires employers to maintain these records for a specific period, so make sure you adhere to the specified retention period. One thing that can greatly help you with this is by using reliable time-tracking software.

Tip #3 Classify employees correctly

Properly classify your workers as employees or independent contractors. Whether you do it knowingly or not, misclassifying employees can lead to legal consequences, so ensure that you understand the criteria for each classification and apply them accurately.

Tip #4 Pay employees according to labor laws

Ensure that you comply with Ohio’s minimum wage requirements and pay employees accurately for the hours they work. To do this you will need to track all work hours accurately. You also need to familiarize yourself with overtime pay rules and any specific wage provisions that apply to your industry.

Tip #5 Seek legal guidance if needed

If you have specific concerns or questions about labor laws in Ohio, consult with an employment attorney or seek guidance from the Ohio Bureau of Wage and Hour Administration. Professional advice can help you navigate complex legal requirements and ensure compliance.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.

Learn more about Ohio Labor Laws through our detailed guide.

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