Ohio business compliance consists of both Ohio Labor Laws and federal, ranging from topics such as payroll and minimum wage, employee break and leave laws, to discrimination, recordkeeping, and more. Ohio Labor Laws are meant to strengthen the rights of workers in the state, as well as strengthen the employee-employer relationship.
Managing labor law compliance can get difficult. Companies that are struggling with Ohio Labor Law compliance may want to consider seeking help from an Ohio payroll and HR company like PayBridge.
To get started now, employers can use this article as a guide to help understand and manage compliance with legislation and labor laws throughout Ohio in all key areas, which include, but are not limited to:
Here is everything you need to know about Ohio Labor Laws.
Ohio employers need to be aware of the following laws when it comes to hiring new employees.
While there is no law covering private-sector employers in Ohio, there is a law covering public employers.
Under Ohio Revised Code Section 9.73, public employers are prohibited from inquiring as to an applicant’s criminal history on any form or application for employment. Public employers include a state agency or political subdivision of the state. This law does not apply to private employers.
Ohio public employers may inquire about the applicant’s criminal history once it is determined that an offer of employment is appropriate. However, unless otherwise stated by another state or federal law, applicants may not be disqualified from employment based solely upon a criminal conviction. An employer must consider a number of factors before denying employment.
If employment is denied, the employer is required to disclose whether or not the applicant’s criminal history was the basis of such a decision.
Under Ohio New Hire Reporting law (Ohio Revised Code Section 3121.89-3121.8911), employers are required to report every new employee, temporary employee, rehired employee, or independent contractor working in Ohio to the Ohio New Hire Reporting Center within 20 days of the date of hire.
Employers need to report the following information for each new hire, or recalled employee:
New hires in Ohio may be reported electronically or non-electronically. Employers who are submitting electronically have three options:
Employers who do not wish to use the recommended electronic reporting options can file paper new hire reports via fax or mail. Employers should use the Ohio New Hire Reporting Form, a W4, or another list providing all the required information.
NOTE: Employers with employees in more than one state should register to report to Ohio as a multistate employer with the Federal Office of Child Support Enforcement.
Employers who fail to report new hires in the proper timeframe may receive fines of up to $25 per new hire that was not reported.
If it is deemed that failure to report was intentional on behalf of the employer and employee, fines can reach u to $500 per new hire that was not reported.
One of the most important and largest areas of Labor Laws in Ohio are wage and hour laws. Employers should ensure a proper understanding of these laws before processing payroll in Ohio.
Under the federal Fair Labor Standards Act (FLSA), there are three types of workers: non-exempt, exempt, and independent contractors.
Employers should ensure that they properly classify employees, as the misclassification of a worker may have state and federal monetary consequences.
Ohio minimum wage is regularly updated to account for inflation. So it is important to stay current and have a method in place to stay ahead of minimum wage changes.
For 2023, Ohio minimum wage is $10.10 per hour for non-tipped employees.
Tipped employees may receive a minimum wage of $5.05 per hour, plus their tips. In Ohio, a tipped employee is defined as an employee who customarily and regularly receives more than $30 per month in tips.
NOTE: Tipped employees’ wages and tips must be greater than or equal to the normal minimum wage rate for Ohio. Otherwise, employers must make up the difference.
There are a number of exceptions to Ohio minimum wage, however, there are two primary exceptions that all employers must be aware of.
The first is for smaller employers. In Ohio, employers who gross less than $372,000 are only required to pay employees the federal minimum wage rate of $7.25 per hour.
The second is for minor employees in Ohio under the age of 16, who also may be paid at the federal minimum wage rate of $7.25 per hour.
UPDATE: 11.21.23
Starting January 1st, 2024, Ohio’s minimum wage will increase to $10.45 per hour for non-tipped employees, and $5.25 per hour for tipped employees.
The exception for small employers will also increase from annual gross receipts of less than $372,000 to annual gross receipts of less than $385,000.
According to Ohio Permissible Payroll Deductions, employers may make deductions from wages for the following reasons:
Any deduction not included in the above list must be approved by the public authority and the director and must meet the following requirements:
Under Ohio Wage Payment Timing Law, employers must adhere to certain requirements regarding when wages need to be paid to employees.
Ohio employers are required to pay employees their earned wages from the first half of the preceding month (ending with the fifteenth day) on or before the first day of each month.
As such, employees must be paid for wages earned during the remaining days of the preceding month (16th to the end of the month) on or before the fifteenth day of each month.
NOTE: Employees who are absent on a payday must be paid upon demand at the place where the wages are usually paid (if applicable).
Employers may also pay wages less frequently if based on a written contract and if it is customary in the trade, or when permitted by law. Employers may also pay wages more frequently than required.
It is crucial to ensure employees are paid on time, as late payments can lead to penalties and fines.
Ohio does not have any specific law regulating requirements for final paychecks when an employee quits or is fired. As such, employers should adhere to the general wage payment timing laws of the state when dealing with final pay.
This includes payment of any unused benefits on termination, which is not required. However, an employer who has agreed, either in a written or oral policy or by practice, to pay employees for accrued but unused time off should include such payment in the final paycheck.
In addition to federal overtime requirements, Ohio employers must also comply with requirements under the Minimum Fair Wage Standards (MFWS), enforced by the Ohio Department of Commerce Bureau of Wage & Hour (ODOC).
Under both federal and state law, private employers must pay their employees one and one-half times their regular wage rate for all hours worked in excess of 40 hours during a workweek.
Ohio Overtime Law does not apply to employers whose annual gross sales are less than $150,000, or a franchisor with respect to the franchisor's relationship with a franchisee or an employee of a franchisee (with some exceptions).
However, important to note is that an employer may still be covered under federal overtime law.
State and county employees have the option to take compensatory time off instead of overtime pay under Ohio’s Compensatory Time Law. Any compensatory time taken must be approved by the appropriate supervisor and must be used within 180 days of earning the overtime.
In addition to those who are exempt from overtime under the FLSA, the following types of employees are also exempt from Ohio Overtime law:
Ohio has adopted certain provisions of the federal Portal-to-Portal Act into state law.
Primarily, Ohio’s Portal-to-Portal Act enforces the following:
Ohio generally does not require private employers to provide employees with meal or rest breaks. There are, however, certain rules regarding breaks for minors under Ohio Child Labor Laws.
While the FLSA sets the minimum wage for most employment at 14, as well as other standards when it comes to the employment of minors, employers must also comply with Ohio Child Labor Laws. When state and federal laws overlap, the law that provides the most protection to minors will apply.
First and foremost, in order to hire an employee ages 14-17 the employee must have a minor work permit. The employer must also come to an agreement with the minor regarding the wages or compensation they shall receive.
Ohio child labor laws also cover the following topics:
In order to employ minors, Ohio employers must:
Employers are also required to provide minor employees with a rest period of at least 30 minutes for every 5 consecutive hours worked.
While Ohio does not have any state law requiring paid or unpaid leave, sick time, or any such related law, Ohio employers must still maintain compliance with the Federal Family Medical Leave Act (FMLA) as well as:
Employers may still offer things such as annual, vacation, or sick leave under their own policies. Such employers must adhere to their established policies in order to avoid legal trouble.
While there is no law that specifically states employers allow specific time off for employees to serve on a jury, there are certain prohibitions regarding leave taken for jury duty purposes under Ohio Jury Duty Leave Law.
First and foremost, employers may not discharge, threaten to discharge, or take any disciplinary action against an employee who has been summoned for jury duty. However, employees are required to provide reasonable notice to their employer if they have been summoned for jury duty, and intent to be absent from work to serve as part of said jury.
Employers are also prohibited from requiring an employee to use annual, vacation, or sick leave for time spent responding to a summons for jury duty.
Similar to jury duty leave, Ohio Voting Leave Law doesn’t specifically state employers must allow specific time off for employees to vote.
However, Ohio employers must allow employees to take time off to vote without discharging or threatening to discharge an employee for taking a reasonable amount of time to vote on election day.
Employers are also prohibited from:
Ohio Victim Leave also doesn’t specifically state employers must allow specific time off for employees when it comes to court attendance necessary to protect the rights of victims.
However, under Ohio Victim Leave Law, no employer may discharge, discipline, or otherwise retaliate against the victim, a member of the victim's family, or a victim's representative for any of the following:
An employer who knowingly violates the protections under this law shall be found in contempt of court.
While Ohio does not require that employers provide disability benefits, the state does have its own law regarding continuation of coverage.
While all covered Ohio employers must comply with Federal COBRA law (employers with 20 or more employees), employers who are not covered by federal law may still be covered under Ohio COBRA law, otherwise referred to as Ohio mini-COBRA.
Ohio mini-COBRA law applies to businesses with less than 20 employees. It provides continuation coverage for individuals who have lost their group health insurance as a result of involuntary termination of employment for reasons other than gross misconduct.
Under Ohio Unemployment Insurance Law, covered employers include those who:
Covered employers can register their business by going to the Department of Job & Family Services. The employer is also responsible for reporting liability as soon as one or more employees are in covered employment.
Workers' compensation provides benefits to workers who are injured on the job or have a work-related illness. Ohio Workers’ Compensation Law requires all employers with one or more employees to obtain workers’ compensation insurance.
Employers must submit an Application for Ohio Workers’ Compensation Coverage (U-3) along with a $120 (minimum) non-refundable application fee in order to gain coverage with the state.
Medical benefits and lost wages are paid to employees by the Bureau of Workers’ Compensation (BWC) unless the employer chooses to self-insure.
While there are no state Occupational Safety and Health (OSHA) laws for Ohio, Ohio employers do need to maintain compliance with federal OSHA law.
Additionally, employers in Ohio should be aware of laws regarding smoking in the workplace.
Under Ohio’s Smoke-Free Workplace Law, employers are responsible for:
Ohio employees are protected under both federal discrimination laws and state discrimination laws. Employers need to familiarize themselves with both in order to stay in compliance with equal opportunity employment laws.
The Ohio Civil Rights Act contains Ohio’s state laws against discrimination. It is composed of Ohio Revised Code Chapter 4112 and Ohio Administrative Code Chapter 4112.
In Ohio, employers with four or more employees are covered by state discrimination laws and must ensure not to implement any Ohio discriminatory practices.
Like all states, Ohio requires employers to post certain labor law posters and notices, as well as keep certain records regarding employee information.
Ohio employers are required to post labor law posters and notices under Ohio State law for the following topics:
Ohio employers must also display labor law posters under federal law on the following topics:
Under Ohio Recordkeeping law, employers with one or more employees must keep employment and payroll records for each employee going back a minimum of 5 years.
These records must include:
Employers must also keep available all records needed for state audits. These include, but are not limited to:
Ohio regulations are constantly changing on a federal, state, and local level. Businesses and Ohio employers who are struggling with compliance may want to reach out to an Ohio HR Outsourcing Company, which can help organizations stay up-to-date and compliant.
Companies looking for Ohio HR services can find a provider now, or contact us for more information.
Tony Chiviles is Managing Partner and one of the founders of PayBridge, a leading Ohio payroll services company. Tony is responsible for the day-to-day operations of PayBridge, including production, implementation, customer service, and sales. Tony’s dedicated and innovative leadership helped Paybridge define a unique niche in integrating payroll and retirement to benefit our clients, and to make our valued TPA partners more competitive using PayBridge's Web-based payroll and other related solutions.
Tony has been key in establishing PayBridge as a national presence. He brought to PayBridge a rare combination of Fortune 500 and entrepreneurial start-up experiences, and his successful track record spans 15 years of leadership across sales, marketing, financial, and technical areas in payroll and IT consulting, including national-level leadership with Fortune 500 firm Ceridian Corp. Complementing that large payroll firm experience, Tony has launched several successful startup firms targeting specific niches in payroll and IT.