July 12, 2018
Author: Josephine S. Noble, Esq
Organization: HAHN, LOESER + PARKS, LLC
One of the easiest mistakes an employer can make when dealing with wage and hour issues is to fail to consider compliance with applicable state law. Most often, discussions about wage and hour obligations focus on compliance with the federal Fair Labor Standards Act (“FLSA”) of 1938, 29 U.S.C. §§ 203, et seq. However, applicable state law may set forth different and/or additional standards from those established under the FLSA. This presentation focuses on state law considerations for wage and hour compliance, with a particular focus on Ohio law. The presentation provides an overview of Ohio’s key wage and hour laws and discusses common compliance pitfalls and best practices for avoiding costly mistakes.
II. OHIO’S KEY WAGE AND HOUR LAWS
A. Ohio’s Minimum Fair Wage Standards Act, Ohio Revised Code § 4111.01, et seq.
Ohio’s Minimum Fair Wage Standards Act is codified in Chapter 4111 of the Ohio Revised Code. The Act sets forth Ohio’s minimum fair wage standards, including the minimum amount of pay that must be provided to employees, overtime compensation requirements, requirements for posting in the workplace a notice summarizing the Act’s provisions and its related regulations, recordkeeping requirements for wage-related documents, and prohibitions for employers with regard to retaliation, discrimination and penalties for nonpayment of the minimum wage.
1. Amount of Minimum Wage
Ohio’s current minimum wage is $7.95 per hour, up from $7.85 last year. However, employers may pay workers who are under the age of 16 the lower, federal minimum wage of $7.25 per hour. In addition, Ohio’s $7.95 per hour minimum wage applies only to employers whose gross annual revenue is more than $292,000, up from $288,000 last year. The determinative annual gross revenue figure is adjusted each year based on the rate of inflation. Ohio employers with gross annual revenue figures less than or equal to $292,000 may pay employees at the lower, federal minimum wage rate of $7.25. However, even if an employer grosses more than $292,000 annually, there are exceptions that may apply to relieve the employer of the obligation to pay the minimum wage rate set forth in § 4111. Those exceptions are discussed below.
Sally Sue is the HR Rep. at Buckeye Burger. She currently pays her cashiers $7.25/hr. None of these employees earn tips or are handicapped. Is Sally Sue compliant with § 4111?
Answer: Yes. But, only with respect to those cashiers who are under the age of 16.
2. Exceptions to Minimum Wage Requirement
The Ohio Minimum Fair Wage Standards Act provides for various exceptions, exemptions and exclusions from its minimum wage requirements. For example, tipped employees need not be paid the minimum wage of $7.95 per hour. Tipped employees are those who customarily and regularly receive more than $30 a month in tips. Ohio employers may pay their tipped employees at least half of the state minimum wage rate ($3.98 an hour), but only if the total amount of the tips, combined with the employer-paid wages, is equal to or greater than the minimum wage rate for all hours worked. If the employee does not receive sufficient tips to total $7.95 per hour when added to the employee’s hourly cash wage, the employer must make up the difference. Only tips actually received by tipped employees may be counted as wages for purposes of determining the appropriate minimum wage the employer must pay. In addition, Ohio employers may pay less than the minimum wage rate to handicapped workers,provided the employer has obtained a license to do so from the Ohio Department of Commerce.
The purpose of this exception is “to prevent curtailment of opportunities for employment, to avoid undue hardship, and to safeguard the minimum wage rates under Ohio minimum wage law.” See Ohio Admin. Code § 4101:9-1-01. The following types of licenses are available: Work Activity Center Program; Sheltered Workshop Program; On-The-Job Training Temporary Individual; Individual Regular Business or Industry; Individual Program Rate in a Facility. Id.
To obtain such a license, an employer must submit an application to the Superintendent of the Division of Labor and Worker Safety, Ohio Department of Commerce, at 50 West Broad Street, Columbus, Ohio 43215. Id. The application must state the nature of the individual’s disability, provide a description of the occupation at which the individual is to be employed, and state the wage the employer proposes to pay the individual. See Ohio Admin. Code § 4101:9-1-03.
However, in instances where an employer has non-disabled workers employed at piece rates, disabled workers in the same occupation must be paid at the full piece rate. Id. To determine whether a license should be issued, the director of the Department of Commerce, or his or her authorized representative, may conduct investigations and may require additional information, including requiring the worker to take a medical or psychological examination. Ohio employers also may pay subminimum wages to licensed apprentices. See Ohio Rev. Code § 4111.07. However, the wage paid to such apprentices must be at least 85% of the minimum wage rate, and there is a time limit of 90-days for such a reduced-wage apprenticeship. Id. An employer may not allow an apprentice to work 180 half-days at the subminimum wage rate.
Mary wants to work at ACME Corp. badly. No position is available currently, but, the hiring manager agrees to cut her a break and give her a job since she offered to work for $5.00/hr. Is this ok under § 4111?
No. Unless some exception, exemption or exclusion applies. Employees cannot agree to waive their minimum wage rights.
3. Penalties For Failing To Pay Minimum Wage
Failure to pay the appropriate minimum wage as required under Ohio Rev. Code § 4111 can be a costly mistake. Section 4111.99(B) states that it is a third degree misdemeanor for an employer to pay less than the applicable minimum wage. See Ohio Rev. Code §§ 4111.99(B), 4111.13(C). A third degree misdemeanor under Ohio law carries a fine of up to $500 and potential jail time of up to 60 days. See Ohio Rev. Code §§ 2929.24(A)(3), 2929.28(A)(2)(a)(iii). Each week that an employer fails to pay an employee the appropriate minimum wage constitutes a separate offense. See Ohio Rev. Code § 4111.13(C). The employer also is liable for the amount of the underpayment as well as court costs and attorney’s fees. See Ohio Rev. Code § 4111.10(A). Moreover, if a state or court determines that an employer has failed to comply with its minimum wage payment obligations under § 4111, the employer is liable for an additional amount of liquidated damages equal to two times the amount of back wages owed. See Ohio Rev. Code § 4111.14(J). The back wages and liquidated damages must be paid within 30 days of a finding of a violation, pursuant to Article II, Section 34a of the Ohio Constitution.
4. Individual Liability For Minimum Wage Violations
Section 34a of Article II of the Ohio Constitution states that: “[a]s used in this section: ‘employer,’ ‘employee,’ ‘employ,’ ‘person’ and ‘independent contractor’ have the same meanings as under the federal Fair Labor Standards Act or its successor law . . . .” See Section 34a of Article II of the Ohio Constitution, see also Ohio Rev. Code. § 4111.02. Under the FLSA, an “employer” is defined as “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.” 29 U.S.C. § 203(d). The majority of federal courts have determined that an individual can meet this broad definition of “employer” under certain circumstances.
As the Second Circuit recently discussed in Irizarry v. Catsimatidis, 722 F.3d 99, 106 (2d Cir. July 9, 2013), in determining whether an individual may be liable for wage and hour violations under the FLSA, the totality of the circumstances must be considered, including factors such as the scope of an individual’s authority or “operational control” over the company, including consideration of at what level of the corporate hierarchy and in what relationship with the plaintiff/employees must the individual possess power to be liable under the FLSA. Id. at 106.
Buck Rogers is the President of BigCo. He has an accountant who handles payroll issues. The Board of Directors recently directed the accountant not to pay 16-yearolds more than $7.00/hr. and the accountant complied. Colton, who is 16, quits his job at BigCo and sues both the company and Rogers. Does Colton have a claim against Rogers?
Yes. Rogers likely is an “employer” within the meaning of the FLSA, which definition has been adopted by Ohio in application of the Ohio Minimum Fair Wage Standards Act. Therefore, Rogers can be held liable on an individual basis.
In addition, the court noted that the individual’s actual power should be considered (i.e. to what extent and with what frequency must an individual actually use the power he or she possesses over employees to be considered an “employer” within the meaning of the FLSA?) Id. at 106. The court concluded that an individual need not have direct control over the plaintiffs/employees to be held individually liable. Even where an individual contends that he or she merely makes “symbolic” or general corporate decisions that only affect the plaintiffs/employees in an attenuated fashion, that degree of operational control may be sufficient to render the individual personally liable, especially in instances where the individual’s responsibilities include such tasks as determining employee salaries, which is a significant aspect of the day-to-day functions of a company and directly affects the nature and conditions of an employee’s employment. See id. at 107-108.
In Irizarry, the court ruled that the chairman, president and CEO of Gristede’s Foods, Inc. could be individually liable for FLSA violations because he hired managerial employees, exercised financial control over the company, was involved in central day-to-day operations such as having contact with individual stores, employees, vendors and customers and handling customer complaints, in-store displays and merchandising, although he did not have any responsibility for the alleged FLSA violations or directly manage or otherwise interact with the plaintiffs in the case. Id. at 108-116.
A similar decision was reached in Rubio v. Fuji Sushi & Teppani Inc., No. 6:11-cv-1753-Orl- 37TBS, 2013 WL 230216, at *5 (M.D. Fla. Jan. 22, 2013), in which the court concluded that the President of Fuji Sushi & Teppani Inc., Nabani Howlander (“Howlander”) could be held individually liable for FLSA violations committed by the company. The court reasoned that Howlander: testified that he was responsible for all of the operations at Fuji; some individuals assisted him, but he was “responsible for everything.” He hired and fired employees, personally terminated Plaintiff Charlette Rubio’s employment, trained employees, controlled employee work schedules, worked with Fuji’s accountant who dealt with payroll issues, kept pay records, and was responsible for making sure that all employees received minimum wage. Thus, the record is clear that Howlander took an active role in the day-to-day operation of the restaurant. . . .
Accordingly, Plaintiffs are entitled to summary judgment on this issue. Howlander is jointly and severally liable for any FLSA violations committed by Fuji. Id. (internal citations omitted). Of particular note is a recent decision from the Court of Appeals of the Eleventh Circuit, Lamonica v. Safe Hurricane Shutters Inc., No. 11-1574320, 711 F.3d 1299 (11th Cir. 2013), which decision suggests that liability for wage and hour violations may not be limited to only officers, but also could reach beyond such high-level executives to potentially encompass supervisors and perhaps even human resources representatives. In Lamonica, the court stated that, in light of the broad definition of “employer” provided for in the FLSA, the court would join the “overwhelming weight of authority” and hold that “a corporate officer with operational control of a corporation’s covered enterprise is an employer along with the corporation, jointly
and severally liable under the FLSA for unpaid wages.” Lamonica, 711 F.3d at 1309 (citing Patel v. Wargo, 803 F.2d 632, 637-38 (11th Cir. 1986) (quoting Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir. 1983))). The court then considered whether corporate supervisors, other than officers, may be personally liable under the FLSA, and what degree and type of operational control would support such individual liability. The court noted that the FLSA’s broad definition of “employer” did not purport to limit personal liability to officers, instead the court emphasized that whether an individual fits that definition “does not depend on technical or isolated factors but rather on the circumstances of the whole activity.” Lamonica, 711 F.3d at 1309-10 (citing Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 515 F.3d 1150, 1160 (11th Cir. 2008) (quoting Hodgson v. Griffin & Brand of McAllen, Inc., 471 F.2d 235, 237 (5th Cir. 1973))) (internal quotation marks omitted). The court, therefore, concluded: In the typical case, a corporation’s officers will exercise more operational control than its directors and therefore be more susceptible to personal liability. However, usual corporate roles are not always observed, and some directors may assume more operational control than some officers. Therefore, a supervisor’s title does not in itself establish or preclude his or her liability under the FLSA, and the district court was correct in refusing to instruct the jury to the contrary. Lamonica, 711 F.3d at 1310.
The significance of the federal law governing individual liability is that it can help bring a greater sense of urgency to corporate officers, supervisors and human resources professionals in considering compliance issues, as it is not simply a matter of potential liability for the company but also could result in those individuals also personally paying the price for violations.
5. Overtime Compensation Requirements
The Ohio Minimum Fair Wage Standards Act also sets forth the requirement that certain employers pay overtime compensation to employees at a rate of one and a half times the worker’s regular hourly rate for all hours in excess of 40 in a given workweek. See Ohio Rev. Code § 4111.03. This requirement applies to all employers who have annual gross income greater than or equal to $150,000. Employers whose annual earnings are less than $150,000 are not required to pay their employees overtime compensation. Additional exceptions apply, as discussed below.
6. Exceptions to Overtime Requirements
There are several categories of employees to whom employers, regardless of their annual gross income, are not required to pay overtime compensation, including agricultural employees; federal employees, baby-sitters or live-in companions; newspapers deliverers; outside salespersons on commission, or executive, administrative, or professional employees as defined under the FLSA; individuals providing personal services of a charitable nature in a hospital or health institution; a member of a police or fire protection agency or a student employed on a part-time or seasonal basis by a political subdivision, and employees of camps or recreational areas for children under age 18 owned and operated by a nonprofit organization.
7. Penalties For Failing To Pay Overtime
Failure to pay the appropriate overtime compensation as required under Ohio Rev. Code § 4111 subjects an employer (and potential certain individual officers, directors and supervisors of the company) to the same penalties as set forth for failure to pay the minimum wage. See pg. 4 of this white paper, at Section A.3.
8. Posting Requirements
Ohio Rev. Code § 4111.09 provides that “[e]very employer subject to sections 4111.01 to 4111.17 of the Revised Code, or to any rules issued thereunder, shall keep a summary of the sections, approved by the director of commerce, and copies of any applicable rules issued thereunder, or a summary of the rules, posted in a conspicuous and accessible place in or about the premises wherein any person subject thereto is employed.” An employer may obtain copies of the requisite notice from the Ohio Department of Commerce website free of charge.
Steve has taken a summer college internship at Cleveland City Hall, where he is
performing administrative work, earning $7.95/hr. His schedule is 9 a.m. – 2 p.m., but he often volunteers to stay late to help the office avoid getting backed up in processing paperwork. When he gets his first paycheck, he is upset because he was not paid overtime. Should he have been?
Answer: No. He is a student working part-time for a political subdivision. He also does not qualify for the administrative professional exemption because he does not earn at least $455/week.
A notice summarizing § 4111 and its related regulations is posted in the HR Manager’s office of ACME Corp., an Ohio corporation. The office is accessible only by other HR staff because it contains confidential personnel information. Is this ok under § 4111?
Answer: No. Posting must be in a “conspicuous and accessible place” in or about the premises where the work is performed.
9. Failure to Comply with Posting Requirements
Failure to post notice of the fair minimum wage standards as required under Ohio Rev. Code § 4111 is a fourth degree misdemeanor. See Ohio Rev. Code §§ 4111.99(A), 4111.13(A). A fourth degree misdemeanor under Ohio law carries a fine of up to $250 and potential jail time of up to 30 days. See Ohio Rev. Code §§ 2929.24(A)(4), 2929.28(A)(2)(a)(iv). Each day that the required notice remains un-posted constitutes a separate offense. See Ohio Rev. Code § 4111.13(A).
10. Recordkeeping Requirements
Ohio Rev. Code § 4111.08 requires employers to keep records of certain wage-related employment information, including of: the name, address, and occupation of each employee; the rate of pay and amount paid each pay period to each employee; and the hours worked each day and each week by each employee. See Ohio Rev. Code §§ 4111.08, 4111.14(F)(3). Likewise, employers of minors must retain certain additional records related to the minors’ wages and employment, including their work permit (obtained through the local school district), wage agreement (listing wages to be paid), a record of their breaks (showing their start and stop time), a list of minors employed in a conspicuous place, and a minor labor law poster. Section 4111.08 sets forth an employer’s obligation to maintain certain records regarding an employee and § 4111.14 sets forth provisions governing to whom and under what circumstances those records may be disclosed. An employer has no right to withhold wage records from an employee or his or her authorized representative and cannot demand that a subpoena for the records be issued before the employer provides the records.
However, one of the Act’s stated goals is to “[p]rotect the privacy of Ohio employees’ pay and personal information . . . by restricting an employee’s access, and access by a person acting on behalf of that employee, to the employee’s own pay and personal information.” See Ohio Rev. Code § 4111.14(A)(4) (emphasis added). The Act defines persons “acting on behalf of an employee” fairly narrowly, limiting such individuals to only (a) the certified or legally recognized collective bargaining representative for that employee; (b) the employee’s attorney; or (c) the employee’s parent, guardian or legal custodian. See Ohio Rev. Code § 4111.14(G)(2).
On December 31, 2012, John Smith asked his employer for copies of his wage records to show an attorney. His employer refused, well aware that John likely was preparing to sue. Should the employer withhold the records?
Answer: No. Employers must provide wage records upon request and free of charge to employees or persons authorized to make such a request who are acting on behalf of an employee.
Thus, an employee’s spouse, unless he or she is the employee’s union representative, guardian, legal custodian or attorney, could not make such a request. Likewise, an employee could not seek to obtain records relating to another employee’s wages, rather, the employee can only request and obtain his or her own information. In responding to a request for wage records, the employee may require that the employee, or his or her authorized representative, make the request in writing and that the writing be signed by the employee and notarized. See Ohio Rev. Code § 4111.14(G)(4). The employer also may require that the request be reasonably specific as to what information is being requested. See Ohio Rev. Code § 4111.14(G)(3).
Where a representative purports to act on behalf of more than one employee, an employer may feel backed into a corner. On the one hand, nothing prohibits an attorney, for example, from seeking to obtain wage records for hundreds of employees outside of the scope of litigation. See Ohio Rev. Code § 4111.14(H)(2) (stating: “‘Acting on behalf of one or more employees’ has the same meaning as ‘acting on behalf of an employee’ in division (G)(2) of this section.”) However, there are ways employers can “fight back.” For example, an employer can assert that requiring the employer to respond to a request for wage records for multiple employees, within 30 days, poses a hardship, and the employer can thereby obtain additional time to respond. However, the obligation to respond still would remain. Additionally, the employer can compel the requesting representative to first secure signed and notarized, written requests from each employee, as § 4111.14(H)(2) provides that “[e]ach employee must provide a separate written and notarized authorization before the person acting on that employee’s or those employees’ behalf may request the name, address, occupation, pay rate, hours worked for each day worked, and each amount paid for the particular employee.” Id. 10Moreover, Ohio Rev. Code § 4111.14(F)(3) specifically provides that an employer is notrequired to maintain any such records for years prior to January 1, 2007.
John’s attorney contacted his employer on January 3, 2013, in response to which the employer provided the records on March 1, 2013, when the records custodian returned from vacation. Is this acceptable under § 4111?
Answer: No. The employer’s response is late. Records must be provided within 30 business days (Feb. 15, 2013), unless: (a) the parties agree to an alternative or (b) complying with the 30-day deadline would cause a hardship, in which case the records must be provided as soon as possible. See Ohio Rev. Code § 4111.14(G)(3).
11. Failure to Maintain or Provide Records
Failure to maintain or provide wage records as required under Ohio Rev. Code § 4111 is a fourth degree misdemeanor, which carries a fine of up to $250 and potential jail time of up to 30 days.
See Ohio Rev. Code §§ 4111.99(A), 4111.13(A), 2929.24(A)(4), 2929.28(A)(2)(a)(iv). Each day that the required documents have not been maintained/retained constitutes a separate offense. See Ohio Rev. Code § 4111.13(A).Thus, destroying pertinent wage records too soon could cause an employer to easily and quickly be faced with significant financial liability.
When John’s attorney received the records, he noticed there were none for 2003-2008, which were John’s first five years of employment. The attorney threatened to file a complaint on this issue. Does he have a valid claim?
Answer: No. Records need only be kept for three years.
An employee reports to the Department of Commerce that ACME Corp. has failed to maintain wage records as required under § 4111. An investigation reveals ACME generally complied, but destroyed certain records two months too soon. ACME has 200 employees. What potential fines might apply?
Answer: $250.00 per day x 60 days = $15,000 per employee.$15,000 x 200 employees = $3,000,000.
Despite his lack of a valid claim, John’s attorney filed a complaint with the Bureau of Wage and Hour Administration and an investigation began. The HR Manager was subpoenaed and testified but refused to allow other employees to be questioned. Problem?
Answer: Yes. The Bureau of Wage and Hour Administration can bring court actions and/or enter businesses to investigate.
In accordance with Section 34a of Article II of the Ohio Constitution, the state may on its own initiative investigate an employer’s compliance with Section 34a and any law or regulation implementing Section 34a (i.e. § 4111). See Ohio Rev. Code §§ 4111.04, 4111.14(I). Should the Ohio Department of Commerce’s Bureau of Wage and Hour Administration seek to investigate an employer’s compliance, or a complaint or report of noncompliance, with § 4111, the employer must make available to the Bureau any records related to such investigation and other information required for enforcement of Section 34a or any law or regulation implementing Section 34a. Id.
As part of its investigative process, the state may: [e]nter and inspect the place of business or employment of any employer for the purpose of inspecting any books, registers, payrolls, or other records of the employer that in any way relate to the question of wages, hours, and other conditions of employment of any employees, and may question the employees for the purpose of ascertaining whether sections 4111.01 to 4111.17 of the Revised Code, and the rules adopted thereunder, have been and are being obeyed. See Ohio Rev. Code. § 4111.04(B).
In addition, should an employer refuse to cooperate with the Bureau’s investigation, the Bureau’s director may issue subpoenas and compel attendance of witnesses and production of papers, books, accounts, payrolls, documents, records and testimony relating and relevant to the investigation. See Ohio Rev. Code. § 4111.04(C). All records and information related to investigations by the state are confidential and are not a public record subject to section 149.43 of the Revised Code. This division does not prevent the state from releasing to or exchanging with other state and federal wage and hour regulatory authorities information related to investigations. See Ohio Rev. Code. § 4111.14(I).
12. Prohibition on Retaliation
Ohio Rev. Code § 4111.13(B) expressly prohibits an employer from discharging or in any other manner discriminating against any employee because the employee has made any complaint to the employee’s employer, or to the Bureau of Wage and Hour Administration, that the employee has not been paid wages in accordance with §§ 4111.01 to 4111.17 of the Revised Code, or because the employee has made any complaint or is about to cause to be instituted any proceeding under or related to those sections, or because the employee has testified or is about to testify in any proceeding. See Ohio Rev. Code. § 4111.13(B).
13. What is Retaliation
When analyzing retaliation claims asserted under the Ohio Minimum Fair Wage Standards Act, Ohio courts rely on federal case law interpreting retaliation claims under the FLSA. See Murray v. Mary Glynn Homes, Inc. No. 1:11 CV 00532, 2013 WL 4054595, at *16 (N.D. Ohio Aug. 12, 2013) (citing Peterson v. Buckeye Steel Casings, 729 N.E.2d 813, 821-22, 133 Ohio App.3d 715, 727 (10th Dist. 1999) (“When analyzing retaliation claims, Ohio courts rely on federal case law.”). Federal courts apply the burden-shifting analysis of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) to claims of retaliation under the FLSA. Id. (citing Adair v. Charter County of Wayne, 452 F.3d 482, 489 (6th Cir. 2006). Under that framework, to establish a retaliation claim, an employee must prove that: (1) she engaged in protected activity under the FLSA; (2) her employer was aware of her protected activity; (3) thereafter, her employer took an adverse employment action against her; and (4) there was a causal connection between her protected activity and her employer’s adverse employment action. Id. If the employee establishes the prima facie case, the burden shifts to the employer to set forth a legitimate nonretaliatory reason for the adverse employment action. Id. If the employer does so, the employee must show by a preponderance of the evidence the employer’s proffered reasons are not its true reasons, but, rather, are pretext for illegal discrimination. Id. While an employee’s complaint or report of perceived wage violations certainly is the sort of conduct protected by Ohio’s Minimum Fair Wage Standards Act and the FLSA’s anti-retaliation provisions, retaliation may not be found to exist if the employee’s complaint is too vague and generalized, or not directed to management. Some degree of formality is required. For example, in Minor v. Bostwick Labs., Inc., 669 F.3d 428 (4th Cir. 2012), the court concluded that an employee had not made a sufficiently clear complaint to establish the “protected activity” element of a retaliation claim. The court reasoned that, while protected activity may include “fil[ing] any complaint,” under § 215(a)(3), that does not mean that every instance of an employee “letting off steam” to his employer constitutes protected activity. Id. at 439. To the contrary, “the statute requires fair notice” to employers. To protect employers from unnecessary uncertainty, “some degree of formality” is required for an employee complaint to constitute protected activity, “certainly to the point where the recipient has been given fair notice that a grievance has been lodged and does, or should, reasonably understand that matter as part of its business concerns.” Therefore, the proper standard for the district court to apply is the aforementioned test articulated in Kasten: whether Minor’s complaint to her employer was “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.”
A server complains to co-workers that he is not being paid overtime and plans to file a lawsuit. He tells his co-workers that he is being told to arrive to work 15 minutes early and not allowed to clock in. He also complains to his manager, stating: “you guys don’t treat us right.” Two days later, he is fired for refusing to serve a customer. Does he have a retaliation claim?
Answer: No. See Minor v. Bostwick Labs., Inc., 669 F.3d 428 (4th Cir. 2012), discussed below. In the above case study, the server’s complaint to management merely indicated that the employee was disgruntled. The employer had no basis from the vague statement “you guys don’t treat us right” to conclude that the employee was referring to alleged wage and hour violations. The employee could just as easily have been venting about assignment of work schedules, or other issues.
Contrariwise, in Murray v. Mary Glynn Homes, Inc., No. 1:11 CV 00532, 2013 WL 4054595, at *16 (N.D. Ohio Aug. 12, 2013), the court found that an employee’s discussion with her manager sufficiently put the employer on notice that she was making a protected complaint about wage and hour issues. In reaching this conclusion, the court first noted that, in Kasten v. Saint–Gobain Performance Plastics Corporation, ––– U.S. ––––, 131 S.Ct. 1325, 179 L.Ed.2d 379 (2011), the Supreme Court determined that, while an oral complaint can be sufficient to merit the protections of the anti-retaliation provision, the complaint must be specific enough to provide reasonable
notice to the employer:
To fall within the scope of the anti[-]retaliation provision, a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light both content and context, as an assertion of rights protected by the statute and call for their protection. This standard can be met, however, by oral complaints, as well as by written ones. Murray, 2013 WL 4054595, at *16-*17 (quoting Kasten, 131 S.Ct. at 1335). However, the court determined that this test was met because, during her deposition, the plaintiff
testified that she raised the issue with her manager in person near the end of April 2009: I sa[id], “It’s against the law to work somebody for 24 hours.” So he told me,
“You don’t work 24 hours. You work 16. The other eight you sleep.” I said, “I haven’t slept eight hours since I’ve been here.” And he said, “Well, the other eight hours are sleep.” I said, “So since you say that, let me work my 16 hours. Let me go home and come back when my shift’s supposed to start.” He said, “I can’t do that.” I said, “So then I work 24 hours.” Then he told me—he said, “If I would have put this job in the paper, the people would have been around the corner waitin’ for this job. Murray, 2013 WL 4054595, at *17. In light of this testimony, the court concluded that, although Murray did not specifically invoke the FLSA, her testimony established that she raised the issue of her 24–hour shift with her manager, argued that it was “against the law” to require her to work that number of hours in one shift, and requested permission—which the manager denied—to leave after working 16 hours. The court ruled that, given that Murray questioned the legality of scheduling her for a 24–hour shift and, in response to her manager’s explanation that her shift was only 16 hours long, requested that she be permitted to leave after 16 hours, her complaint was sufficiently detailed and clear to put the manager on notice that she was asserting her rights under the FLSA and to call for its protections. Id. (citing Ghobrial v. Pak Mfg., Inc., No. 11–2023, 2012 WL 893079 (D.N.J. Mar. 13, 2012) (finding that plaintiff’s complaint that he had been “misclassified” and should have been paid an hourly wage was sufficient to invoke the protections of the anti-retaliation provision); Riffe v. Wal–Mart Stores, Inc., No 1:11–CV–266, 2012 WL 204164 (N.D. Ohio Jan. 24, 2012) (plaintiff’s complaints not sufficient where she complained about answering calls at home and made electronic adjustments to her time record to compensate herself for that time); Hawks v. Forest River, No. 3:09–CV–532, 2011 WL 5434241 (N.D. Ind. Nov. 8, 2011) (plaintiff’s complaint not sufficient to invoke anti-retaliation provision because she mentioned that she was aware of a difference in pay between men and women without asserting its illegality); Truckenmiller v. Burgess Health Ctr., 814 F. Supp. 2d 894 (N.D. Iowa 2011) (finding that the plaintiff’s mention, during leadership meetings, that women and men at the same leadership level were paid different salaries and had different titles was sufficient to constitute a complaint and merit the protections of the anti-retaliation provision)).
In addition, the server’s refusal to serve a customer, which led to his discharge, was not protected because it was an unreasonable method of protesting the alleged wage violations. The antiretaliation provision does not shield disruptive, insubordinate conduct. Therefore, a refusal to perform work is generally not protected, and excessive time spent on complaints will not excuse an employee’s failure to get work done or refusal of additional assignments. The Fifth Circuit provides useful guidance on this issue in the context of Title VII retaliation claims. Specifically, the Fifth Circuit recognizes that “[n]ot all activities taken in opposition to an employer’s perceived discriminatory practices ... remain insulated from reprisal under Title VII’s shield.” Smith v. Texas Dep’t of Water Res., 818 F.2d 363, 365-66 (5th Cir. 1987); Jones v. Flagship Int’l, 793 F.2d 714, 727 (5th Cir. 1986). The opposition clause “was not intended to immunizeinsubordinate, disruptive, or nonproductive behavior at work.” Smith, 818 F.2d at 366 (quoting Armstrong v. Index Journal Co., 647 F.2d 441, 448 (4th Cir. 1981)). “Allowing an employee to invoke the protection of [Title VII’s opposition provision] for conduct aimed at achieving purely ulterior objectives, or for conduct aimed at achieving even proper objectives through the use of improper means, could have an effect directly contrary to Congress’ goal, by discouraging employers from hiring persons whom the Act is designed to protect.” Hochstadt v. Worcester Found, for Experimental Biology, 545 F.2d 222 (1st Cir. 1976). Thus, some opposition activity, even though sincere, may be inappropriate to justify Title VII liability. See Jones, 793 F.2d at 727.
The Fifth Circuit employs a balancing test to determine whether Title VII’s protections may be denied to an employee’s activities that result in adverse employment action. Courts must balance the employer’s right to run his business against the rights of the employee to express his grievances and promote his own welfare. For the employee’s conduct to fall under the ambit of “protected activity,” it must be “reasonable in light of the circumstances” and must not be “unjustifiably detrimental to the employer’s interest.” Douglas v. DynMcDermott Petroleum Ops. Co., 144 F.3d 364, 373 (5th Cir. 1998); Payne v. McLemore’s Wholesale & Retail Stores, 654 F.2d 1130, 1136, 1145 (5th Cir. 1981).
In addition, in considering potential retaliation claims, one must keep in mind the expanding nature of retaliation claims. While the focus used to be solely on the employee’s protected activity, one must now consider the activity of a given employee and his or her associates. See Thompson v. North American Stainless, LP, 131 S. Ct. 863 (2011).
14. Penalties for Retaliation
Retaliating against an employee because of his or her report or complaint of a wage violation or participating in a wage-related proceeding is a third degree misdemeanor, which carries a fine of up to $500 and potential jail time of up to 60 days. See Ohio Rev. Code §§ 4111.99(B), 4111.13(B), 2929.24(A)(3), 2929.28(A)(2)(a)(iii). In addition, an employer who retaliates against an employee for reporting a violation or participating in a wage-related proceeding is subject to punitive damages in an amount sufficient to compensate the employee and deter future violations but in no event less than $150.00 for each day that the violation continued, pursuant to the Article II, Section 34a of the Ohio Constitution. Payment of these damages is not delayed pending appeal.
15. Prohibition on Discrimination
Employers cannot discriminate in the payment of wages on the basis of race, color, religion, sex, age, national origin, or ancestry by paying wages to any employee at a rate less than the rate paid to another employee for equal work on jobs requiring equal skill, effort, and responsibility, and that are performed under similar conditions. § 4111.17. There are, however, a few exceptions where the difference in pay is pursuant to a (a) seniority system; ;(b) merit system; (c) system based on quantity or quality of product; (d) a wage rate differential determined by a factor that is not protected (i.e., some factor other than race, age, etc.).
16. Issues in Litigating an Equal Pay Act Claim
As with retaliation claims under the Minimum Fair Wage Standards Act, claims of discrimination under Ohio’s Equal Pay law are evaluated by reliance on federal law. See, e.g., Stone v. Greater Cleveland Regional Transit Auth., 92 Ohio App.3d 373, 383-84, 635 N.E.2d 1281, 1288 (8th 1993) (relying on federal law to evaluate an Ohio equal pay claim). Under the federal Equal Pay Act, there are seven elements which plaintiff must prove to establish a case of wage discrimination: “1. an employer; 2. pays or paid different wages; 3. to employees of the opposite sex (or of different races); 4. in an establishment; 5. when they are performing equal work on jobs; 6. which require equal skill, effort, and responsibility; 7. under similar working conditions.” Id.
Jody complains that she unfairly is paid $10.00/hr. less than males performing equal work under the same conditions. To resolve the issue, her employer reduces the males’ pay to the same rate as Jody’s, which satisfies her, but disgruntles the men. Was the employer’s action legal?
Answer: No. See Ohio Rev. Code § 4111.17(C): “No employer shall reduce the wage rate of any employee in order to comply with this section.”
Two frequent issues arising in litigation on equal pay act claims are (1) the nature of the positions that the employee claims are the equal and require equal skill, effort, and responsibility and are undertaken under similar working conditions and (2) the extent of the employee’s knowledge about the pay, performance and other key facts concerning the alleged comparator employees.
Whether a job is substantially equal is determined on a case-by-case basis and resolved by an overall comparison of the work, not its individual segments. Hinders v. City of Dayton, Ohio, No. 3:12-cv-273, 2013 WL 5723079, at *3 (S.D. Ohio Oct. 21, 2013). The focus at the prima facie stage is on actual job requirements and duties rather than job classifications or titles. Id.; see also 29 C.F.R. § 1620.13(e) (“Application of the equal pay standard is not dependent on job classifications or titles but depends rather on actual job requirements and performance.”). Moreover, “[e]qual work does not require that the jobs be identical, but only that there exist substantial equality of skill, effort, responsibility, and working conditions.” Id. (citing Buntin v.Breathitt County Bd. of Educ., 134 F.3d 796, 799 (6th Cir. 1998). In comparing jobs under the Act (for purposes of establishing a prima facie case), the court emphasizes that the jobs and not the employees are compared. Thus, “only the skills actually required by [the comparable] jobs, not the abilities of the persons currently in those positions are relevant [and] it is the job as a whole, not just selected aspects of it that must form the basis for comparison.” Id. (quoting EEOC v. The City Council of the City of Cleveland, No. 88–3726, 1989 U.S.App. LEXIS 7281, at *13–14, 1989 WL 54252 (6th Cir. May 24, 1989).
Applying these legal standards, in Lang v. Columbus Div. of Power and Water, 10th Dist. No. 11AP-968, 2012-Ohio-2037, the court found that a male engineer failed to establish a prima facie case of discrimination because he could not demonstrate that his position was “equal” to that of the alleged comparator female engineer. The court concluded that although the engineers’ jobs required the same experience level, the female engineer’s position required additional training, and effort required of female engineer’s job, which required working in traffic, climbing towers, and entering vaults and other spaces where there was possibility of being exposed to dangerous gases or lack of oxygen, was substantially different from male engineer'’ job, which was performed almost entirely in an office. Another significant factor in discrimination cases is the employee’s knowledge of the alleged comparator’s pay and job duties. In several Ohio state court decisions, the courts have granted summary judgment to an employer where the plaintiff/employee had no personal knowledge of any purported wage disparity or the alleged comparator’s job duties. For example, in Stone v. Greater Cleveland Regional Transit Auth., 92 Ohio App.3d 373, 383-84, 635 N.E.2d 1281, 1288
(8th 1993), the court granted summary judgment on the plaintiff’s equal pay claims, and in favor of the Transit Authority, reasoning that the plaintiff did not possess personal knowledge of the alleged comparator’s employment file, evaluations, job description, responsibilities, or educational background to establish that the comparator was paid at a higher rate while possessing less skill or responsibility, or exerting less effort.See also Hollowell v. Society Bank & Trust, 78 Ohio App.3d 574, 582, 605 N.E.2d 954, 959 (6th Dist. 1992), in which the court reached a similar conclusion:
Hollowell bases his entire claim of wage discrimination on the “facts” he presents in paragraph 33 of his affidavit dated December 5, 1990. As a result of working in the same department and attending weekly staff meetings, Hollowell claims he has personal knowledge of Caucasian employee Ken Woeller’s job responsibilities. However, plaintiff does not possess personal knowledge of Woeller’s employment file, including performance evaluations, job description, responsibilities, pay records, and other information which would establish that Woeller was paid at a higher rate than Hollowell while possessing less skill, responsibility, or seniority, or exerting less effort than plaintiff. Again, plaintiff has failed to meet his burden. From the evidence presented by the parties, there are no genuine issues of material fact, even construing the facts and making all reasonable inferences most strongly in plaintiff's favor. Therefore, defendants are entitled to judgment as a matter of law. Accordingly defendants’ motion for summary judgment as to the wage discrimination claim based on R.C. 4111.17(A) is granted and plaintiff’s is denied. Id.
17. Penalties for Discrimination
Violation of § 4111.17 is a minor misdemeanor, which carries a fine of up to $150. In addition, an employee can recover two times the difference between the wages the employee actually received and what the employee should have been paid (based on the salary of those performing equal work) as liquidated damages, in addition to backpay.
B. Ohio’s Prevailing Wage law, Ohio Revised Code § 4115.03, et seq. Prevailing Wage is the required wage to be paid to skilled trades employees on public improvement construction projects. Ohio’s Prevailing Wage Law is codified in Ohio Revised Code § 4115. Section 4115 defines prevailing wage as the sum of the following:
- Base hourly rate of pay
- Life insurance
- Health insurance
- Vacation or paid holidays
- Apprenticeship programs
- Other bona fide fringe benefits
There are different thresholds for employees involved in “New” construction projects, which involve roads, streets, alleys, sewers, ditches and other works connected to road or bridge construction threshold level has been adjusted to and “Reconstruction” projects, which involve reconstruction, enlargement, alteration, repair, remodeling, renovation, or painting” of roads, streets, alleys, sewers, ditches and other works connected to road or bridge construction. The thresholds are adjusted biennially by the Director of the Ohio Department of Commerce.
Biennial adjustments to threshold levels are made according to the Price Deflator for Construction Index, but may not increase or decrease more than 3% for any year. Before advertising for bids, contracting or undertaking construction with its own forces, a public authority must:
- · Have the Department of Commerce determine the prevailing wage rate schedule for workers (§ 4115.04);
- · Ensure that every contract for public work contains a provision that each worker employed by the contractor or subcontractor, or other person about or upon the public work, must be paid the prevailing rate of wages (§ 4115.06).
If contracts are not awarded or construction undertaken within 90 days from the date of the determination of the prevailing wage, then the public authority must request a redetermination of the wage rates before the contract is awarded. § 4115.05.
A public authority must designate and appoint one of its own employees to serve as the
Prevailing Wage Coordinator during the life of the contract for constructing the public improvement. § 4115.071. The Prevailing Wage Coordinator must be appointed no later than ten days before the first payment of wage by contractors to employees working on the public improvement. The Prevailing Wage Coordinator’s Responsibilities include the following:
- Attend all pre-construction meetings;
- Set up and maintain, for inspection, certified payrolls;
- Obtain the contractor’s payroll schedule;
- Receive complete payroll including names, current addresses, social security number, number of hours worked, pay, fringe benefits, job classification and deductions;
- Notify all contractors of changes to wage rates within seven days of published changes;
- Monitor compliance with timely filing of certified payrolls;
- Receive Affidavit of Compliance at end of project; and
- Report delinquency in filing to public authority and Ohio Department of Commerce Certified payroll reports must include all of the following:
- Name, current address and social security number of each employee;
- Each worker’s classification for the work being performed;
- Total hours worked for each classification by each worker;
- Hourly rate of pay for each worker in each classification;
- Fringe benefit contributions; and
- Total of gross wages, list of all deductions and final net pay for each worker. The contractor likewise has a host of compliance responsibilities, including:
- Pay the correct prevailing wage for the correct classification, which includes any modifications, changes or corrections made during the project (§ 4115.07);
- Paying the overtime rate at one and a half times the base hourly rate and adding all applicable fringe benefit payments (§ 4115.031);
- Taking no deduction for food, lodging, transportation, etc. unless the deductions are pre-approved by the employee and the Ohio Department of Commerce (§ 4115.07);
- Using only registered apprentices within the ration posted within the prevailing wage schedule (§ 4115.05).
- Maintaining full and accurate payroll records, which must include time cards, time sheets, daily work records, etc.; payroll ledger/journals, cancelled checks or a check register; detailed records of bona fide fringe benefits; records made in connection with the specific public improvement project (§ 4115.07
- Post up-to-date prevailing wage rate schedules in an area on the job site accessible to employees (§ 4115.07);
- Supply the prevailing wage coordinator with all payroll dates prior to submitting payroll reports (§ 4115.071);
- Supply the prevailing wage coordinator with a complete list of names, addresses and contact information for any/all subcontractors (§ 4115.06);
- Supply employees with written notification of specific job classification, prevailing wage rate, fringe benefit contributions and the name and contact information for the prevailing wage coordinator prior to beginning work on the project (§ 4115.05);
- Supply all subcontractors with the applicable prevailing wage rate schedule, which includes any/all applicable change to these schedules during the project (§ 4115.06);
- Submit certified payroll reports within two weeks of after the initial pay period(§ 4115.07); and
- Upon completion of the project, submit to the prevailing wage coordinator a completed Final Affidavit of Compliance (§ 4115.07).
Contractors are responsible for their subcontractor’s compliance with prevailing wage laws.
C. Ohio’s Wage Payment Law, Ohio Revised Code 4113.01, et seq.
1. Frequency of Payment
Employees must be paid at least semi-monthly and must be paid by the first day of the month for any work done in the first half of the preceding month, and they must be paid by the 15th day of the month for any work done in the last half of the preceding month. Ohio Rev. Code § 4113.15.
In some instances, wages may be paid on a less frequent basis, e.g., monthly, if the use of such a pay period is “customary to a given trade, profession or occupation.” Ohio Rev. Code § 4113.15. Nothing prohibits an employer from paying employees more frequently than semimonthly.
Final wages are due on the first regularly scheduled payday following the last day of
employment. Ohio Rev. Code § 4113.15. If wages are not paid within 30 days of the scheduled payday or within 60 days of demand if there is no scheduled payday, an employer is liable to employees for the amount of wages plus damages of the greater of 6 percent of wages due or $200. Violation of the wage payment law is a misdemeanor of the first degree, which carries a fine of up to $1,000 and jail time of up to 180 days.
There is no Ohio law prohibiting “use it or lose it” policies for private employers. However, unused vacation must be paid out if the employer has a written policy (or has a practice) that the employee has “earned” or “accrued” the vacation time. Employers can write their policies to make it clear that vacation has not been earned or accrued (or that it is forfeited) upon termination, however.
2. Method of Payment
Employers can pay wages in cash or by check. There are no state laws or regulations regarding direct deposit. However, according to the Department of Commerce, employers may make direct deposit mandatory for employees. There also are no state laws or regulations regarding payroll debit cards. However, the Department of commerce has stated that payroll debits cards are permitted if there is no charge to employees and employers may make use of payroll debit cards mandatory.
3. Pay Statements
There are no state laws or regulations regarding pay statements. However, employers must provide employees with information on amounts paid and amounts deducted from the employee’s pay upon the employee’s request. There also are no state laws or regulations regarding electronic pay statements. Employers may provide information requested by employees in any format. Employers also must ensure compliance with wage recordkeeping requirements.
4. Wage Deductions
Employers can deduct the following from employee wages:
• amounts for federal, state, or local taxes;
• amounts pursuant to written agreements to provide fringe benefits to employees; and
• amounts authorized by employees. Employees can authorize deductions for the following:
• amounts for health, welfare, or retirement benefits;
• amounts for vacation, separation, or holiday pay;
• amounts for the purchase of savings bonds or stocks;
• amounts for charitable contributions;
• amounts for credit union or other savings plans; or
• amounts for the repayment of loans or obligations
Employers that agree to withhold authorized deductions for benefits must pay withheld amounts within 30 days of the close of a pay period. Deductions for damages of an employer’s wares, tools, or machinery can be made only pursuant to express contract with employees.
Employers cannot require job applicants to pay the cost of medical examinations as a condition of employment.
Employers that violate the permitted deduction requirements are guilty of a misdemeanor of the first degree, punishable by a fine of up to $1,000 or imprisonment for up to 180 days. Employers that deduct from employee wages for damages of wares, tools, or machinery without an express contract to do so, are guilty of a minor misdemeanor, punishable by a fine of up to $150.
5. Notes on Child Support
Child support orders have priority over all other garnishments and assignments. All public and private employers are required to comply with child support orders and must begin withholding for child support the first pay period occurring 14 business days after receipt of an order and must remit withheld amounts to the child support agency no later than seven business days of a wage payment. An employee’s personal earnings, workers’ compensation, unemployment, disability, sick, and retirement benefits are all subject to withholding. The maximum amount subject to withholding under a child support order is 50% of disposable income if a noncustodial parent is supporting a second family or 60% if there is no second family. Employers with 50 or more employees must remit child support payments electronically to the state.
Employers that fail to withhold child support can be ordered to make payments by electronic funds transfer and are liable for child support amounts not withheld or remitted and in addition can be fined up to $200 for failure to withhold support or to comply with the notification requirements.
Employers that fail to comply with a withholding or medical support order also can be found in contempt of court. The punishment for a first contempt offense is a fine of up to $250, imprisonment for up to 30 days, or both; for a second offense, up to $500, 60 days, or both; and for a third or subsequent offense, up to $1,000, 90 days, or both.
Employers that discharge or take other disciplinary action against employees or that refuse to hire applicants because of child support withholding can be fined up to $500.
6. Notes on Unclaimed Wages
Ohio employers must report and remit unclaimed wages annually. The law covers unclaimed monies payable as wages, salaries, or commissions for services rendered, as well as amounts owed under pension and profit-sharing plans. As part of a “due diligence” requirement, employers must send a Notice of Unclaimed Funds to the last known address of all employees owed more than $50. Employers can use the state form (OUF-8) or generate their own notices.
Notices are sent to payees owed $50 to $1,000 by first class mail; for payees owed more than $1,000, the notice must be sent by certified mail, return receipt requested.
Wages are presumed abandoned one year after becoming payable. However, employers must keep applicable records for five years after wages are presumed abandoned, or until the completion of an audit. Employers must include in their records:
• the June 30 dormant account lists(s),
• signed OUF-8s,
• documentation of certified mailing to accounts with a balance of $1,000 or more,
• bad address mail from OUF-8 mailings, and
• other research documentation used to exclude accounts from