Employers are required to navigate incredibly complicated wage and hour laws. As an example, it’s imperative to know both federal and state guidelines in each state in which you employ workers and then follow both. These rules apply to minimum wage, overtime, and more.
What is minimum wage?
Both federal and state law set a minimum hourly wage that employers must pay their employees for performing work. The federal minimum wage rate is $7.25 per hour, but Ohio employers must follow the more stringent Ohio minimum wage, which is $9.30 per hour.
There are some exceptions:
- employees who are under 16 years old can be paid the federal minimum wage instead of the higher state minimum wage
- employees who work for companies that gross less than 314,000 per year can be paid the federal minimum wage instead of the higher state minimum wage
- tipped employees can be paid the minimum wage for tipped employees, which is $4.30, as long as their employers can demonstrate that their wages plus their tips bring them to at least the full minimum wage rate on average
What is overtime?
Federal law entitles employees to an increased rate of pay when they work more than 40 hours in a single workweek. While some states expand on this protection by requiring employees to pay overtime when an employee’s workday exceeds a certain number of hours, Ohio’s overtime rules align with federal guidelines. Employees in Ohio are owed overtime pay when they work over 40 hours in a single work week.
Both federal and Ohio overtime salary is ‘time and a half,’ or 1.5 times the employee’s base of rate of pay. That means when an employee works more than 40 hours in a single workweek, they must receive 1.5 times their regular rate of pay for the hours worked beyond 40. While it can be tempting to try to work around overtime pay by offering the employee a day off next week, that is in direct violation of overtime pay rules.
There are some exceptions when it comes to overtime as well; the Fair Labor Standards Act (FLSA) outlines the types of employees who must be paid overtime and those who can be deemed exempt from overtime. For example, practical nurses, paralegals, police, firefighters, and paramedics are all entitled to overtime pay.
How can I track overtime?
The safest way to ensure compliance with minimum wage and overtime is through a combination of training and software solutions. Training is imperative to ensure supervisors within your organization are never encouraging employees to forfeit overtime pay unethically when they’ve already exceeded 40 hours in a given work week in Ohio (“I’ll just give you Monday off so the boss doesn’t breath down my neck about overtime pay again…”).
Software solutions can be especially helpful in automating overtime tracking and calculations; when you use time and attendance software, hours over 40 in a single workweek can be automatically reclassified and calculated accordingly.
To learn more about ASAP Payroll, your Ohio-compliant timekeeping and payroll solution, request a free demo today.
