Ohio’s minimum wage is 85 cents higher than the federal baseline for hourly paid workers, but at least 93,000 workers in the state earned wages at or below the federal minimum last year, according to the U.S. Bureau of Labor Statistics.
Ohio workers were among an estimated 2.6 million nationwide who earned at or below the prevailing federal minimum wage of $7.25 per hour. That represents 3.3 percent of all hourly paid workers, according to a BLS report.
About 2.9 percent of Ohioans earned at or below the federal minimum — slightly lower than the national rate but still higher than some might expect in a state with a mandated minimum wage of $8.10 per hour.
Experts attribute the disparity to a variety of factors, including labor laws that allow employers in some cases to pay some workers — farmhands and disabled workers, for example — less than the minimum.
But much of the gap can be attributed to employers violating minimum wage and overtime laws and exploiting tipped employees, who comprise a large share of Ohio’s labor force, said Michael Shields, a researcher at Policy Matters Ohio who focuses on wages and job quality.
Last year, more than 427,000 Ohioans worked in the food and restaurant industries, which account for a large share of job growth in the state since the economic recovery from the last recession began, according to Shields.
Wages and tips
In Ohio, employers are allowed to pay tipped employees who make at least $30 a month in tips a minimum of $4.05 per hour, although the employers are required to bring those employees up to an hourly wage of at least the state’s regular minimum wage if their combined tips and wages don’t meet the state minimum.
Employers often flaunt such provisions, according to Shields, and the practice is difficult to enforce because the government has only about 1,100 wage-and-hour investigators to monitor millions of employers nationwide, including just six in Ohio.
“The employer is suppose to make up the difference, but we’re seeing pervasive cases of restaurants not doing that,” he said. “We have major incidents of wage theft here in Ohio, and, really, across the nation.”
Shields cited a U.S. Department of Labor report that found between 2010 and 2012, the department’s wage-and-hour division conducted nearly 9,000 investigations nationwide in the full service sector of the restaurant industry and found 84 percent to be in violation.
While the violations may not have been specifically for underpaying tipped employees, the high violation rate indicates “the incidence of wage theft is really just staggering,” he said.
Several area restaurant owners pushed back at that assertion, noting that intense competition has forced them to pay higher wages than the state minimum.
“In order to get the employee that you need, you can’t just pay the minium wage,” said Douglas Rowland, owner of Our Hero Subs sandwich shop in Springfield. “If a person can go to another store and make 50 cents or 75 cents more on the dollar, they’ll uproot in a second. They just go for the higher wage, and leave you hanging.”
Dan Young of Young’s Jersey Dairy in Yellow Springs said he’s never had much trouble attracting and retaining workers, but he’s had to keep wages competitive to slow turnover and attract better candidates, who may also be looking for jobs in other industries.
“We here at Young’s are blessed with a lot of folks for whom this was their first choice for their first job,” the owner said. “But you always need a good mix of people who are working their first job, and people who know what they’re doing. So we end up going above (minimum wage) — as much as $2 or $3 an hour, or even more than that depending on the job — to attract good people.”
Salaried vs. hourly
According to the Labor Department, restaurant wages shot up by an annualized rate of more than 3 percent in the second half of last year, or nearly twice the rate of overall wage growth.
But not all restaurant and food-service workers have benefited, because it’s not uncommon for employers to classify workers as salaried managers, although they’re mainly cooking, cleaning or working the cash register.
Mia Whorton of Trotwood said she would often work 60 or 70 hours a week as a dining room and cafeteria manager for a catering company she declined to name. But her annual salary was so low that she was still able to qualify for Medicaid, which is available to most people in Ohio with annual earnings up to 138 percent of poverty, or about $27,000 for a family of three in 2015.
“I’m sure I was making less than the minimum wage on an hourly basis,” Whorton said. “Sometimes, I would work two weeks straight, and I would never get paid overtime. I’m working as a home health aid now. The pay isn’t much better.”