New Legislation Undermines the Minimum Wage Amendment

December 20, 2006
   

On November 7, 2006, over two million Ohioans voted for an amendment to the state constitution that raised the minimum wage and indexed it to inflation. The amendment offered broader coverage to Ohio workers than federal law. In the waning days of a December “lame duck” session, the Ohio legislature passed implementing legislation (House Bill 690) that undermined the new constitutional amendment. Policy Matters Ohio and other groups objected to the bill, most notably because it denied coverage to home health care workers, part-time police and fire personnel, outside salespersons, and others who clearly should be covered.

Under Strickland Administration, the Department of Commerce interpreted the details of the legislative language to close some of the loopholes that the legislature tried to open. For example, the Department’s interpretation covers home health care workers, amusement park workers, and certain farm laborers.

Now that most Ohioans are covered by the state minimum wage, the challenge of enforcement shifts to the state. The number of minimum wage and overtime complaints filed with the Department of Commerce during the first half of 2007 is more than double the level of the first half of 2006, but staff levels have not kept pace. Policymakers should pay close attention to whether the volume of complaints continues at a high level, and should provide more resources if necessary.

Recent federal minimum wage legislation may have little effect on Ohio. By the time the federal minimum wage increase is fully phased-in at $7.25 an hour in July 2009, Ohio’s minimum wage likely will be at this level, if not greater, due to its built-in inflation adjustment. Full coverage under the new amendment, coupled with strong enforcement, is essential to provide a minimum standard of living to Ohio’s workers.

Click here to read our testimony on the initial version of the implementing legislation. The final version of the bill restored the Department of Commerce’s ability to conduct employer-wide investigations and removed a provision that banned agreements to work for less than minimum wage, but did not address the other concerns raised in the testimony.

For additional information, read a letter sent by Professor Ken Kowalski of the Cleveland State University Marshall College of Law to the Senate Insurance, Commerce, & Labor Committee on December 19, 2006 stating reasons why the bill is inconsistent with the constitutional amendment.

(Read the letter.)

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