Ohio Minimum Wage 2024

In response to the ongoing rise in the cost of living, several states within the United States are revising their minimum wage rates, and Ohio has emerged as an active participant in this nationwide trend. Ohio minimum wage has been strategically adjusted to keep pace with inflationary pressures.

This comprehensive guide will cover the current state of Ohio’s minimum wage for the year 2024 and offer insights into forthcoming adjustments. Additionally, it will provide practical recommendations for individuals and businesses on effectively guiding and preparing for these impending changes.

What Is the Minimum Wage Rate in Ohio?

Effective January 1, 2024, Ohio raised its minimum wage to $10.45 per hour for non-tipped employees, surpassing the Federal Minimum Wage of $7.25 per hour. This adjustment applies only to business employees with annual gross revenues exceeding $385,000.

Ohio’s minimum wage adjustments are linked to the Consumer Price Index, ensuring the wage rate keeps pace with inflation. This annual reevaluation of the wage rate stems from a Constitutional Amendment (II-34a), approved by Ohio voters in November 2006, which mandates that the state’s minimum wage increases each January 1 according to inflation rates.

Additionally, there are movements within various Ohio cities to promote wages that exceed the state minimum. For instance, in Cleveland, a collaboration with One Fair Wage provides grants to certain small businesses, such as restaurants and coffee shops, enabling them to pay their employees higher wages.

Historical Overview of Minimum Wage Rate in Ohio in Recent Past

Ohio’s minimum wage history reflects significant evolution shaped by state-specific legislation and broader economic trends. The journey began in 1938 when the Fair Labor Standards Act established the first federal minimum wage of $0.25 per hour, which Ohio initially adopted and followed for decades. As the cost of living rose, Ohio diverged from the federal rate; by 1971, the state had set its minimum wage at $1.60 per hour, higher than the federal minimum of $1.45, signaling a shift toward more autonomous economic policies.

The 1980s marked another key development when Ohio voters passed a ballot initiative that linked the state’s minimum wage to the Consumer Price Index (CPI-W). This change meant wages would automatically adjust in line with inflation, ensuring gradual increases without requiring legislative action each year. As a result, by 2023, the minimum wage reached $10.10 per hour for non-tipped employees and $5.05 for tipped employees. These rates climbed further in 2024, reflecting a 3.7% rise in inflation, setting non-tipped and tipped rates at $10.45 and $5.25 per hour, respectively.

Here is an overview of Minimum wage rates for employers in Ohio in the recent past:

Year	Minimum Wage Rate (Per Hour)
2018	$8.30
2019	$8.55
2020	$8.70
2021	$8.80
2022	$9.30
2023	$10.10
2024	$10.45

Today, the future of Ohio’s minimum wage continues to be debated. Advocates push for substantial increases to meet living expenses better, while opponents caution against potential economic repercussions.

Minimum Wage Rate Variation Across Ohio

Effective January 1, 2024, Ohio raised its minimum wage for non-tipped employees to $10.45 per hour and $5.25 per hour for tipped employees. These increases apply to businesses generating more than $385,000 in annual gross receipts. However, the minimum wage for smaller businesses and employees aged 14 and 15 matches the federal minimum of $7.25 per hour.

In three major Ohio cities—Columbus, Cleveland, and Cincinnati—the local minimum wage is $15.00 per hour, surpassing the statewide minimum. Employees working in cities with higher minimum wages are legally entitled to the greater rate, regardless of the lower state-mandated minimum.

Overtime Pay Guidelines in Ohio

In Ohio, businesses must pay workers 1.5x their regular hourly rate for hours worked over 40 in a week. Small businesses making under $150,000 annually are exempt from this rule.

Overtime costs can accumulate, especially in sectors such as hospitality, where employees often work shifts. Take a restaurant with employees following a 2-2-3 shift schedule, for instance. During certain weeks, staff may work up to five 12-hour shifts, amounting to 60 hours.

For such a week, wages for the first 40 hours would be at the standard hourly rate of $10.45, adding up to $418.00. The additional 20 hours, paid at the overtime rate of $15.67 per hour, would cost $313.40. Therefore, the total payment for a 60-hour week would amount to $731.40.

Minimum Wage Regulations for Tipped Employees in Ohio

Under Ohio’s minimum wage laws, employees who earn more than $30 per month in tips, such as those in the restaurant and broader hospitality sectors, are categorized as tipped employees. In contrast, non-tipped employees do not make over $30 monthly from tips.

Ohio law allows employers to apply for a tip credit, enabling them to pay tipped employees a lower base wage of $5.25 per hour. However, when combined with the tips earned, this wage must reach or exceed the state minimum wage of $10.45 per hour. Employers must ensure and demonstrate that their tipped employees’ total earnings, combining cash wages and tips, meet or surpass the minimum wage standard.

Ohio Minimum Wage Exemptions and Special Categories

Ohio’s minimum wage regulations incorporate various exemptions and special provisions that cater to different employment scenarios, allowing some employers to offer wages below the standard state minimum.

• Youth Employment: Employers can pay workers under 20 a reduced wage during their first 90 days of employment, facilitating early work experiences.
• Minors (16 years old): In Ohio, businesses can pay workers under 16 a reduced wage that matches the federal minimum wage. Therefore, the minimum wage for minors in Ohio is set at $7.25 per hour.
• Student Employment: Part-time or occasional student workers may be eligible for a lower wage to prevent interference with their educational commitments.
• Employees with Disabilities: Under specific conditions, employers may offer a lower wage to employees with disabilities that impede their job performance.

Special Cases Include:

• Small Businesses: Those with annual gross receipts under $385,000 are not bound by state minimum wage laws and may instead pay the federal minimum of $7.25 per hour.
• Seasonal or Recreational Employment: Workers in certain seasonal roles, such as at summer camps or amusement parks, may be exempt from minimum wage requirements during their first 90 days.
• Small Newspaper Workers: Newspaper employees with fewer than 5,000 copies in circulation may also be exempt from the state minimum wage.

These exemptions and special cases provide necessary flexibility for specific employer and employee groups, ensuring a balance between flexible employment practices and the protection of worker wages.

Tips for Adhering to Ohio’s Minimum Wage Requirements

As a small business owner in Ohio, I find it crucial to actively comply with the state’s minimum wage regulations to prevent penalties, legal issues, and employee dissatisfaction. Here are effective strategies to ensure compliance:

• Stay Updated on Wage Adjustments: Ohio adjusts its minimum wage annually at the end of each year based on the Consumer Price Index (CPI). These updates take effect on January 1, so it’s important to know them. Setting calendar reminders can help you keep track of these changes.
• Display the Latest Wage Information: Legally, you must prominently display the updated Ohio Minimum Wage poster in your workplace by January 1 each year. This promotes transparency and helps you meet labor law posting requirements.
• Adjust Payroll Systems: Update your payroll and accounting systems prior to the implementation of new wage rates. Software like Homebase can automate these updates, enhancing accuracy and saving time.
• Assess Employee Classifications: To apply the appropriate wage rates, correctly classify your employees, whether they are minors, tipped workers, or non-exempt staff. Consider factors such as age, job type, and hours worked.
• Keep Thorough Payroll Records: Under Ohio law, you must maintain detailed payroll documentation for each employee, including hours worked, wages paid, and any overtime. These records should be kept for at least three years and be readily accessible for inspections.
• Manage Tip Calculations: Ensure that the total earnings of tipped employees, such as servers and hair stylists, from wages and tips combined, at least equal the minimum wage. Monitor and adjust their pay as needed to comply.

By implementing these practices, you’ll comply with Ohio’s minimum wage laws, encourage a positive working environment, and minimize the risk of compliance issues. Tools like Homebase can further simplify the management of these responsibilities.

Conclusion

Ohio’s 2024 minimum wage adjustments reflect the state’s ongoing commitment to addressing inflation and cost-of-living changes. With the new minimum wage set at $10.45 per hour for non-tipped employees and $5.25 per hour for tipped employees, Ohio continues to lead by linking wage rates to the Consumer Price Index, ensuring that wages keep pace with economic conditions. This adjustment not only helps maintain workers’ purchasing power but also influences local wage standards, with cities like Cleveland, Columbus, and Cincinnati adopting even higher rates.

Businesses and employees must stay informed to ensure compliance and optimal management. By adhering to updated wage rates, maintaining accurate payroll records, and understanding specific exemptions, businesses can steer these adjustments effectively while contributing to a fair and balanced labor market. The proactive measures outlined in this guide will help stakeholders adapt to Ohio’s evolving wage regulations and support a sustainable and equitable work environment.

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