What are an employer’s wage-and-hour obligations under federal and state law?

Wage and hour standards for employees are established by the federal Fair Labor Standards Act (FLSA) and a state law covering most smaller employers in the State of Ohio that are not otherwise subject to the federal statute.  

Federal law fixes the national minimum wage and establishes as a matter of national policy that men and women must receive “equal pay for equal work.” The law also forbids the employment of children under the age of 14, limits work hours for children between the ages of 14 and 16, and limits the duties children may perform.

Federal and state laws on wages also set minimum standards for employees working overtime. Employees who work more than 40 hours in a 7-day workweek must be paid “time-and-a-half” for each hour (or fraction) worked during that period in excess of 40 hours. Merely working more than eight hours in a day, more than five days in a week, on a weekend, or on a holiday does not trigger an employer’s liability for overtime compensation.

Not all employees are eligible for overtime compensation. Hospitals and care centers may calculate overtime on a 14-day basis instead of the 7-day workweek standard applying to other workers, meaning that overtime would be paid to such workers only to the extent they worked more than 80 hours during that 14-day period. The law also gives public employers the option of allowing their employees to be credited with “compensatory time” in lieu of paying overtime.

Certain management employees are also exempt from wage standards under federal and state law. An employer is not required to pay overtime compensation to a management employee who is paid at least $455.00 per week as a set salary not tied to a minimum number of hours worked. Said employee will be ineligible for overtime compensation if his or her work is directly related to the management or business operations of the employer, is in the computer field, or is employed in sales away from the employer’s place of business. This exemption also applies to employees holding jobs requiring a specific license or specialized professional training or requiring artistic or creative duties or responsibilities. A special exemption applies to any hourly computer employee who is paid at the rate of at least $27.63 an hour.

The overtime regulations were substantially changed in 2004. If you were previously entitled to overtime pay, you should consider seeking legal advice concerning your continued eligibility for premium pay.

If your employer has failed to meet its minimum wage obligations to you, contact us to determine if you have a valid claim and can seek an award of double the amount due, plus reimbursement of your attorney fees. Generally, awards are limited to the past two or three years of unpaid wages.

My employer has not paid my wages or other compensation. What are my options?

At the root of any employment relationship is a contract—whether in writing or not—that dictates the terms and conditions of the parties’ agreement respecting terms and conditions of employment and compensation.

When an employer goes bankrupt, closes up shop and leaves town, or just simply stops meeting payroll obligations, an employee’s recourse is to terminate the employment relationship and sue the employer for “damages” equal to the amount of unpaid wages. Qualifying amounts of “wages” and “fringe benefits” not paid within 30 days of the last day of any given pay period are subject to an additional sum for so-called “liquidated damages” under Ohio law, equal to six percent (6%) of the unpaid wages or fringe benefits.

The problem often lies in the fact that the employer is “judgment-proof” (i.e., does not have sufficient assets to satisfy a judgment rendered against the employer) or is not able to be located. Another problem often arises when the employee realizes, while the individual who is the “owner” of the business is more than capable of covering the payroll obligations of the business, that the “owner” is not legally liable for the unpaid wages because the employment contract was between the unpaid employee and corporation set up by the “owner” and the “owner” has not done or failed to do things under Ohio law that would subject himself or herself to personal liability for the corporate obligations.

Besides quitting, your recourse would be to pursue a claim against your former employer in court and file an unemployment compensation claim. This is a situation that likely would qualify for treatment as a “constructive discharge,” so you would not lose your right to receive unemployment compensation benefits just because you quit.

If your unpaid wages and “liquidated damages” do not exceed $3,000, you can file a claim in the Small Claims Division of the municipal court having jurisdiction over the community in which your wages were earned. Otherwise, you would have to file your case in either the General Division of the same municipal court (if your claim does not exceed $15,000) or the Court of Common Pleas of the county in which your wages were earned.

If your employer seeks protection under the Bankruptcy Code, you would have a “priority” claim against the employer’s bankrupt estate in the amount of your unpaid wages, up to $3,000, and you would have an “unsecured” claim against that bankrupt estate for any amount in excess of that amount. Of course, your claim will be satisfied only to the extent there are sufficient assets left after administrative expenses and other claims with “higher” priority are satisfied. Any “unsecured” portion of your claim would be paid only if all priority and “secured” creditors’ claims are first satisfied.