The Supreme Court of Ohio accepted jurisdiction of an appeal from the Second District that will have a far-reaching impact on Ohio employers.
Ohio voters approved the Fair Minimum Wage Amendment to the Ohio Constitution in November 2006. In essence, it states that every employer shall pay its employees a minimum wage rate beginning January 1, 2007. The amendment defines “employee” as having the same meaning as under the federal Fair Labor Standards Act (FLSA). The FLSA defines “employee” as “any individual employed by an employer” subject to certain exceptions. The amendment further states that the General Assembly may pass laws to increase the minimum wage rate and extend coverage, but could not restrict any provision of the amendment.
Two months after voter-approval of the constitutional amendment, the General Assembly enacted R.C. 4111.14. The statute acknowledges the constitutional amendment but contains its own definition of “employee” with an additional exception for “individuals who are exempted from the minimum wage requirements in 29 U.S.C. 213”. 29 U.S.C. 213 contains additional exemptions to the minimum wage and maximum hour requirements of the FLSA for certain employees, such as executives, professionals, and outside salesmen.
In June, the Second District Court of Appeals declared that R.C. 4111.14 is unconstitutional because the definitions of “employee” in the constitutional amendment and in the statute are in “clear conflict”. In Haight et al. v. Minchak, et al., Plaintiffs were outside salesmen for Defendants’ business, which distributed coupon books for consumers under the name “J.B. Dollar Stretcher Magazine”. Although outside salespeople have been historically exempt from federal minimum wage entitlement, Plaintiffs alleged they were nevertheless entitled to receive minimum wage protection under Ohio law. The Court of Appeals determined that because the definition of “employee” according to Article II, Section 34a of the Ohio Constitution is “any individual employed by an employer”, which would include outside salespeople, the Ohio legislature exceeded its authority in enacting R.C. 4111.14 because it impermissibly narrowed the definition to exempt individuals as set forth in 29 U.S.C. 213.
If the Second District’s decision is affirmed by the Supreme Court of Ohio, employers in this state could lose minimum wage exemptions for employees that would otherwise be considered exempt for federal wage purposes. In addition, employers could be exposed to lawsuits brought by current and former employees that did not receive minimum wage compensation on the basis of an exemption.
We will continue to monitor this appeal because of its potential impact on businesses and the political landscape in Ohio. Continue to check back with the Defensive Line blog for updates on this case.
The full text of the Second District Court of Appeal’s opinion can be found here.