Thursday, April 14, 2022

Ohio enacts sweeping changes to state wage and hour laws

Beginning July 6, 2022, Ohio employers have a new set of rules under which to pay their employees. 

SB 47 revamps Ohio's wage and hour statute to correct some major differences that have historically existed between it and the federal Fair Labor Standards Act.

It exempts from overtime pay any time outside of the normal working hours that an employee spends— 

  • commuting to and from the workplace;
  • engaging in activities that are preliminary to or postliminary to the principal activities of the job; and
  • doing de minimum activities that require an insubstantial or insignificant period of time beyond the employee's scheduled working hours (i.e., checking emails or listening to voicemails).
Such time is considering compensable working time if it's done at the specific direction of the employer or is otherwise required by an agreement between the employer and the employee.

SB 47 also converts class action claims from opt-out classes (a class member is part of the class unless he or she expressly chooses not to be) to opt-in classes (consistent with FLSA collective actions).

The Columbus Dispatch quotes the concerns of one policy analysis, worried about some the vague language in the statute: "The undefined language in these two exceptions leaves the application of the law open to court interpretation, providing larger businesses more opportunity to take cases to litigation and leaving workers with less protection."

Those concerns are largely unfounded, as the "vague language" is already defined and interpreted under federal law. 
As for opt-out versus opt-in classes, I see nothing wrong with syncing our state's procedure with federal procedure. It will end the practice of "hybrid" state and federal wage and hour classes, with adds unnecessary complexity and needlessly drives up the cost of the litigation.

The bigger question is what impact these changes will actually have on how Ohio employees are paid. The answer is very little. The FLSA covers all employers with two or more employees that have an annual dollar volume of sales or business of at least $500,000, in addition to medical and nursing care providers, schools and preschools, and government agencies, and also any employees whose work regularly involves them in commerce between States. In other words, the subsets of Ohio employers and employees that the FLSA does not cover is very, very small. To the extent SB 47 gels Ohio's off-the-clock rules with similar rules already applied under the FLSA, SB 47's impact gets even smaller. 

Nevertheless, because of the elimination of opt-out classes for wage claims under Ohio law, SB 47 will present a significant and positive change for Ohio's businesses.