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Your Guide to Ohio’s Minimum Wage

Square
Editorial Team

Many states in the country are adjusting their minimum wage to keep up with the country’s ever-rising cost of living. The Buckeye State is no exception. The Ohio minimum wage was adjusted to keep up with inflation. This article tells you everything you need to know about the current status of the minimum wage in Ohio, and what you can do to prepare for any changes.

What is the minimum wage in Ohio?

The current Ohio minimum wage is $8.70, or $1.45 more than the federal minimum wage. There are a few exceptions to the state minimum wage, such as overtime pay in Ohio, which is $13.05 per hour for any hour worked past 40 hours in a week. The minimum wage for employees at smaller companies and for 14- and 15-year-old workers is at least $7.25—the federal minimum wage standard.

What is minimum wage in Ohio for servers?

A 2006 voter-approved amendment to the Ohio Constitution ties minimum wage to inflation. So each year, the wage increases by a small amount to reflect the increase in the Consumer Price Index (which is used to calculate inflation). In 2019 the increase was 25 cents; in 2018 it was 15 cents per hour; in 2017, it was five cents per hour; and in 2016, it was 15 cents per hour.

Currently, Ohio Democrats, union leaders, and activists want to increase the state’s minimum wage to $13 per hour, and this bill has cleared a couple of hurdles already. Given the Ohio minimum wage history, this bill is well-posed to be approved.

Are there plans to change the state’s minimum wage?

A 2006 voter-approved amendment to the Ohio Constitution ties minimum wage to inflation. So each year, the wage increases by a small amount to reflect the increase in the Consumer Price Index (which is used to calculate inflation). In 2019 the increase was 25 cents; in 2018 it was 15 cents per hour; in 2017, it was five cents per hour; and in 2016, it was 15 cents per hour.

Currently, Ohio Democrats, union leaders, and activists want to increase the state’s minimum wage to $15.

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How should small business owners prepare for minimum wage increases?

Every business is different, so there isn’t one right way to prepare. Here are a few options you may want to consider:

  • Audit your expenses: Check your cash flow in detail and create a hiring plan you can afford. In some cases, you may find that hiring temporary workers or contract workers as needed is less expensive than taking on full-time staff.
  • Make sure you hire and keep the right employees: Replacing an employee costs a lot. You decrease the total cost associated with recruiting and training when you hire (and then retain) the right people. Look for candidates with good track records, who come recommended, and who fit in with the company culture. Once your employee is successfully onboarded, make sure you build a relationship and provide paths for growth; it makes it more likely that they will stay in their role.
  • Increase prices: This is a great way to increase cash flow. Customers are rarely happy with a price hike, but keep in mind that your competitors will be forced to do the same. Just make sure you keep track of trends, and don’t raise prices too high.
  • Update tech: Consider automating certain aspects of the work (like automatic payroll), and find ways to reduce production costs. Square Payroll software has a suite of custom payroll features to help reduce your overhead, all at small business pricing.

As always, to make sure your business is prepared and stays in compliance (get a free EIN), we recommend that you discuss these upcoming changes to the Ohio minimum wage with your accountant and lawyer. And be sure to check out our COVID-19 small business resources to help you and your staff navigate these uncertain times.

The Square Editorial Team is dedicated to telling stories of business, for business owners. Our team comes from a variety of backgrounds and share a passion for providing information that helps businesses to start, run, and grow. The team is based in San Francisco, but has collaborators all over the country.