by Tony Chiviles, on Dec 12, 2023 10:47:32 AM
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.
Ohio Labor Law Compliance Overview
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:
- Recruiting and Hiring Laws
- Wage and Hour Laws
- Child Labor Laws
- Employee Leave and Sick Time Laws
- Employee Benefits Laws
- Unemployment Laws
- Workers’ Compensation Insurance
- Health and Safety Laws
- Discrimination Laws
- Postings, Notifications, and Recordkeeping Requirements
Here is everything you need to know about Ohio Labor Laws.
Ohio Recruiting and Hiring Laws
Ohio employers need to be aware of the following laws when it comes to hiring new employees.
Ohio ‘Ban the Box’ Law and Criminal History
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.
New Hire Reporting in Ohio
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:
- Contractor/Employee's Full Name
- Contractor/Employee's Address
- Contractor FEIN/Employee's Social Security Number
- Contractor/Employee's Date of Hire
- Contractor/Employee's Availability of Medical Benefits (optional)
- Contractor/Employee's Date of Birth
- Employer's name
- Employer's Federal Employer Identification Number (FEIN)
- Employer's address
- Provide address where Income Withholding Orders should be sent
- Employer’s Phone, Fax, Email, Contact Name (optional)
How to Report New Hire Information in Ohio
New hires in Ohio may be reported electronically or non-electronically. Employers who are submitting electronically have three options:
- Employers with only a few reports to submit can manually enter and submit them online via the Ohio New Hire Reporting Center Portal
- Service Bureaus and employers with many reports can upload an electronic file instead of entering reports online
- Registered employers and Service Bureaus who are registered to securely transfer files to the Ohio New Hire Reporting Server can set up automatic File Transfer Protocol (FTP) using FTP client software
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.
Penalties for Failing to Report New Hires
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.
Ohio Wage and Hour Laws
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
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.
Exceptions to Minimum Wage
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.
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.
Deductions from Wages
According to Ohio Permissible Payroll Deductions, employers may make deductions from wages for the following reasons:
- Deductions related to income, school district, or other federal, state, or local taxes
- Deductions required by court order, process, or judgment
- Deductions for contributions by the employee to funds, plans, or programs established by the employer or representatives of employees for fringe benefits (health, retirement, vacation pay, etc.)
- "Employee authorized deductions," which include (but are not limited to) deductions for the purpose of:
- Purchase of United States savings bonds or corporate stocks or bonds;
- A charitable contribution;
- Credit union savings or other regular savings program; or
- Repayment of a loan or other obligation.
Any deduction not included in the above list must be approved by the public authority and the director and must meet the following requirements:
- The deduction is not otherwise prohibited by law
- The employer does not make a profit or benefit directly or indirectly from the deduction in any form
- The deduction is either voluntarily consented to by the employee in writing, prior to the period in which the work is to be done
- The deduction serves the convenience and interest of the employee, his family or beneficiaries
Wage Payment Timing in Ohio
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 Final Pay Requirements
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.
Ohio Overtime Pay and Rules
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.
Who Gets Overtime in Ohio?
In addition to those who are exempt from overtime under the FLSA, the following types of employees are also exempt from Ohio Overtime law:
- Any individual employed by the United States
- 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
- Any individual engaged in the delivery of newspapers to the consumer
- Any individual employed as an outside salesperson compensated by commissions or employed in a bona fide executive, administrative, or professional capacity
- 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
- A member of a police or fire protection agency or student employed on a part-time or seasonal basis by a political subdivision of this state
- Any individual in the employ of a camp or recreational area for children under eighteen years of age and owned and operated by a nonprofit organization or group of organizations described in Section 501(c)(3) of the "Internal Revenue Code of 1954," and exempt from income tax under Section 501(a) of that code
- Any individual employed directly by the house of representatives or directly by the senate
- An individual who operates a vehicle or vessel in the performance of services for or on behalf of a motor carrier transporting property and to whom certain factors apply
Ohio Portal-to-Portal Act Provisions
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:
- Prohibits an employee from joining as a party plaintiff in a lawsuit alleging a violation of Ohio’s overtime requirement unless that employee first gives written consent to become a party plaintiff and that consent is filed with the court in which the lawsuit is brought
- States that employees are not due overtime wages when engaged in traveling to and from a worksite or performing specific tasks
- Incorporates into Ohio’s overtime requirement specified sections of the federal Portal to Portal Act of 1947
Meal and Rest Breaks
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.
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:
- Restrictions on Working Hours
- Prohibited Occupations
- Minimum Wage
Employer Responsibilities for Ohio Youth Employment
In order to employ minors, Ohio employers must:
- Keep a list of minors employed at each place of work
- Post the list of minors employed at each place of work in a conspicuous place to which all minor employees have access
- Keep written records of exact start and stop times for all work and rest periods going back at least two years
Employers are also required to provide minor employees with a rest period of at least 30 minutes for every 5 consecutive hours worked.
Employee Leave Laws in Ohio
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:
- Jury Duty Leave
- Voting Leave
- Victim Leave
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.
Ohio Jury Duty Leave
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.
Ohio Voting Leave
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:
- Requiring employees to accompany him to a voting place upon such day
- Refusing to permit employees to serve as election officials on any registration or election day
- In any manner practicing intimidation in order to induce or compel an employee to vote or refrain from voting
Ohio Victim Leave
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:
- Participating in preparation for a criminal or delinquency proceeding at the prosecutor's request
- Attending a criminal or delinquency proceeding if the attendance is reasonably necessary to protect the interests of the victim
- Attending a criminal or delinquency proceeding if the victim's attendance is pursuant to a victim's constitutional and statutory rights
An employer who knowingly violates the protections under this law shall be found in contempt of court.
Employee Benefits Laws
While Ohio does not require that employers provide disability benefits, the state does have its own law regarding continuation of coverage.
Ohio COBRA and 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.
Ohio Unemployment Laws
Under Ohio Unemployment Insurance Law, covered employers include those who:
- Have at least one employee in covered employment for some portion of a day in each of 20 different weeks within either the current or the preceding calendar year; or
- Paid wages of $1500 or more to employees in covered employment in any calendar quarter within either the current or the preceding calendar year; or
- Are subject to the Federal Unemployment Tax Act in either the current or preceding calendar year; or
- Acquired a business from an employer who was subject to the Ohio law at the time the change of ownership occurred; or
- Elect to cover your employees voluntarily
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.
Ohio Workers’ Compensation Insurance
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.
Health and Safety in Ohio
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.
Ohio Smoke-Free Workplace Requirements
Under Ohio’s Smoke-Free Workplace Law, employers are responsible for:
- Prohibiting smoking in all public places and places of employment
- Removing all ashtrays and other receptacles used for disposing of smoking
- Post conspicuous signs in every public place and place of employment where smoking is prohibited, including at each entrance (the law has certain requirements for such signs)
- Prohibiting smoking in areas immediately adjacent to building entrances and exits
- Ensuring that tobacco smoke does not enter any area in which smoking is prohibited through entrances, windows, ventilation systems, or other means
Ohio Discrimination Laws
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.
Ohio Civil Rights Act
In Ohio, employers with four or more employees are covered by state discrimination laws and must ensure not to implement any Ohio discriminatory practices.
Postings, Notifice, and Recordkeeping Requirements for Ohio Employers
Like all states, Ohio requires employers to post certain labor law posters and notices, as well as keep certain records regarding employee information.
Ohio Labor Law Posting and Notice Requirements
Ohio employers are required to post labor law posters and notices under Ohio State law for the following topics:
- Unemployment Compensation
- Workers' Compensation
- Minimum Wage
- Minor Labor Laws
- Public Employee Risk Reduction
- Workplace Domestic Violence
- Fair Employment Practices Law
Ohio employers must also display labor law posters under federal law on the following topics:
- Equal Employment Opportunity
- Minimum Wage
- Family Medical Leave Act
- US Employment & Reemployment Rights Act (USERRA)
Ohio Labor Law Recordkeeping Requirements
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:
- Name and address
- Social Security account number
- The amount of gross earnings for each pay period before deductions for any purpose
- The date of payment and the amount of wages paid with respect to each separate pay period
- The date or dates on which services were performed for such employer; also, the dates hired or rehired or returned to work after temporary layoff, as well as the date on which services were terminated and the cause of such termination
- The time lost due to being unavailable for work
- The character of the services performed by the individual
- A division between covered and excluded employment, when both such services appear in the same pay period
- The cash value of any remuneration in lieu of or in addition to cash wages
Employers must also keep available all records needed for state audits. These include, but are not limited to:
- General ledgers
- Charts of accounts
- Federal income tax returns
- Social security reports (form 941)
- Federal unemployment tax act reports (form 940)
- Other reports to the United States Internal Revenue Service (forms W-2, and W-3, 1096 and 1099)
- Individual earnings records
- Payroll summaries
- Contribution and wage reports made to the department
- Workers' compensation reports
- City and state payroll reports
- Check registers
- Trial balances
- Balance sheets
- Income statements
- Master vendor lists
- Canceled checks
- Bank statements
- Combined cash journals
Get Help with Ohio Labor Law Compliance
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.
Guest Author: Tony Chiviles
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.