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Your Guide to Ohio’s Minimum Wage

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Ohio’s minimum wage was adjusted to keep up with inflation. This article tells you everything you need to know about the current status of minimum wage, and what you can do to prepare for any changes.

What is the minimum wage in Ohio?

As of January 1, 2020, the minimum wage in Ohio is set to increase to $8.70 per hour for non-tipped workers and $4.35 (tip amount plus this must equal $8.70) for tipped workers. This wage only applies to companies with annual gross receipts over $319,000. 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.

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 payroll), and find ways to reduce production costs.

As always, to make sure your business is prepared and stays in compliance, we recommend that you discuss these upcoming changes to the Ohio minimum wage with your accountant and lawyer.