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Alerts and Updates

New Rules for Ohio Employers in 2024

February 20, 2024

New Rules for Ohio Employers in 2024

February 20, 2024

Read below

Within Ohio, the cities of Cincinnati and Toledo preceded Columbus in passing ordinances that prohibit employers from asking about or using pay history in making hiring decisions. 

Employers across the state of Ohio, including those located in the capital, Columbus, should be aware of the multiple state and local legal updates relevant to their operations in 2024.

State of Ohio

Increased State Minimum Wage

Effective January 1, 2024, Ohio’s minimum wage became $10.45 an hour for nontipped employees and $5.25 an hour for tipped employees, up from the 2023 minimum wage of $10.10 an hour for nontipped employees and $5.05 an hour for tipped employees. The state of Ohio issued a new minimum wage poster for employers to display in their worksites reflecting these updates. Employers should begin using the new poster and ensure that their wage-and-hour practices, including overtime pay rate policies for nonexempt Ohio employees, align with current law.

Legalization of Cannabis for Adult Use

Effective December 7, 2023, Ohio became the 24th state to legalize cannabis for adult use after Ohioans voted in favor of a citizen-initiated statute known as Issue 2. The statute, codified at Ohio Revised Code Chapter 3780, builds in important protections for Ohio employers. For example, the statute explicitly permits employers to prohibit use, possession and distribution of cannabis in the workplace. The statute permits employers to refuse to hire, or to end the employment of, any individual because of their use of cannabis. Further, employers in Ohio are free to require job applicants and current employees to submit to drug tests for the presence of cannabis. Employers should consider the implications of the new statute on their hiring practices, workplace policies and training of frontline supervisors and managers to ensure they are prepared for the many issues that may arise from expanded legalization of cannabis use in the state.

Victim Leave Protections

Ohio employers should be aware of changes in statutory leave available to victims, family members of victims and representatives of victims. The expanded protections, which took effect April 6, 2023, give Ohio employees the right to time off—without loss of pay—to prepare for or attend criminal or delinquency proceedings. In addition to giving Ohio employees the right to time off without loss of pay, the law protects Ohio employees from discharge, discipline or other forms of retaliation for engaging in activities protected under the statute.

Columbus, Ohio

Salary History Inquiry Ban

Effective March 1, 2024, Columbus ordinance No. 0709-2023 prohibits employers from asking job applicants about their current or past wages, benefits, other compensation or salary history, a move that puts the city in the company of the 22 states and more than 20 localities around the country with similar laws in effect. Within Ohio, the cities of Cincinnati and Toledo preceded Columbus in passing ordinances that prohibit employers from asking about or using pay history in making hiring decisions. The impetus for Columbus to enact the ordinance is the recognition that inquiries into a job applicant’s pay history may perpetuate systemic discrimination that the applicant experienced in prior jobs and that eliminating such inquiries promotes pay equity.

The new ordinance will apply to Columbus employers with 15 or more employees. The ordinance includes several exceptions to the general prohibition against asking about or screening job applicants based on their current or past pay. Employers in Columbus may engage in the following activities without violating the ordinance:

  • Consider and/or verify salary history if an applicant voluntarily, without employer prompting, provides the employer with their salary history;
  • Inquire about a job applicant’s expectations for salary, benefits and other compensation, including unvested equity or deferred compensation that an applicant would give up by resigning their current employment;
  • Consider salary history information when considering a current employee for internal transfer or promotion;
  • Consider salary history information that an employer has knowledge of due to an applicant’s prior employment with that same employer within the past three years;
  • Act in accordance with any federal, state or local law that specifically authorizes the reliance on salary history to determine an employee’s compensation;
  • Inquire about objective measures of the job applicant’s past productivity, including with regard to revenue, sales and production reports;
  • Verify an applicant’s disclosure of nonsalary-related information in a pre-hire background check, so long as the employer does not rely solely on salary history information that happens to be disclosed on the background check report in determining the salary paid for the position to which the applicant has applied; and
  • Communicate with applicants about pay rates and benefits set for the job by collective bargaining agreements.

The ordinance vests enforcement authority with the Columbus Community Relations Commission. If the commission receives a complaint and concludes that an employer has violated the ordinance, the employer may be required to pay civil monetary penalties to the city.

Columbus employers should evaluate the way they recruit, interview and negotiate with candidates for positions physically located in the city of Columbus. All persons with a role in the hiring process, including internal and external recruiters, should be familiar with the restrictions and legal implications of the ordinance to prevent violations and the imposition of civil monetary penalties associated with such violations.

Agreements with Independent Contractors

Effective June 1, 2023, Columbus ordinance No. 1016-2023 requires businesses to enter into a written agreement with any “freelance worker” specifying, among other provisions, the rate, method and timing of compensation for services rendered. The ordinance is part of a growing national trend to enact legal protections for “gig” workers and others whose services typically put them outside the scope of laws designed to protect only W-2 employees, including New York State’s Freelance Isn’t Free Act.

The Columbus ordinance defines “freelance worker” as any individual or organization that is hired or retained as an independent contractor, whether or not incorporated as a business entity or using a trade name, to provide goods or services for compensation valued at $250 or more during the prior 120 days. Freelance workers have the right to receive payment for services rendered by the date specified in the written contract or, if no date is specified, by no later than 30 days from when the contracted services are complete. Additionally, hiring entities subject to the ordinance shall not threaten, intimidate, retaliate or discriminate against any freelance worker for exercising any right guaranteed under the ordinance. Hiring entities have the obligation to retain their written agreements with freelance workers for five years.

The Columbus Wage Theft Prevention and Enforcement Commission has authority to enforce the ordinance, including the protections for timely payment of services rendered. In the event the commission receives a complaint and concludes that a hiring entity has violated the ordinance, the city of Columbus may take action against the hiring party, including but not limited to, reducing tax abatements, removing eligibility for low-interest commercial loans, and permanent debarment from contracts with the city.

The ordinance explicitly states that it does not address whether a freelance worker is validly classified as an independent contractor rather than an employee. Misclassification of a worker as an independent contractor, which is outside the scope of the ordinance, has significant potential legal, tax and other ramifications for the hiring entity under federal, state and local law.

Any business in Columbus hiring bona fide independent contractors should ensure that their policies and practices are in line with the ordinance, including with regard to engagement, payment and documentation of the relationship with independent contractors.

What This Means for Employers

The first few months of the year are an opportune time for Ohio businesses to review policies and practices relevant to their workforce to make sure they are in step with current state and local law, including the laws referenced in this Alert.

For More Information

If you have any questions about this Alert, please contact Eve I. Klein, Kathryn R. Brown, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group, or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.