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Clarification on “Lodging” as Compensation under Ohio’s Minimum Wage Laws.

| Dec 13, 2012 | Practice Areas |

You do not need to be an employment attorney to know that Ohio’s minimum wage is currently $7.60 an hour and that the Ohio Department of Commerce recently announced that the minimum wage will be raised to $7.85 beginning on January 1, 2013.  Any employee who works a minimum wage job will quickly be able to quote the actual numbers because every penny counts.  Ohio’s minimum wage laws, however, create certain exceptions that allow employers to pay their employees less than minimum wage. One of these exceptions involves situations in which the employer also provides housing to the employee in question, and many workers who receive lodging and/or a discount on their lodging may feel as if they are exempted from Ohio’s current requirement that they be compensated at least $7.60 an hour.  Ohio’s Fourth District Court of Appeals, however, recently explained that this may not be the case.

In Goodman v. Cleland, 2012-Ohio-5044, decision filed on October 25, 2012, the Court interpreted R.C. § 4111.01(A)’s “lodging” exception to minimum wage requirements as only being available to employers who “customarily furnish” their employees with lodging. The plaintiff employee, in Goodman, was compensated $2.00 an hour for her services at a laundry mat owned by the defendant, and, in opposition to her claim that defendant violated Ohio’s minimum wage laws in regards to her compensation, the defendant presented evidence that the plaintiff lived with her family in a property which he owned and that he supplemented her $2.00 an hour compensation by reducing her rent.  The Court, however, held that only employers who engage in a common practice of furnishing lodging for their employees can claim that they supplement their employees’ wages via lodging, and ultimately upheld an award of over $15,000.00 for the plaintiff in unpaid minimum wages.

The Goodman holding is important for employment attorneys who handle minimum wage lawsuits because the defendant operated a very small business (employing only three people) and the fact that the defendant’s other employees did not require lodging did not dissuade the Court from holding that he did not meet R.C. § 4111.01(A)’s “lodging” exception.  As such, an employer who only provides lodging to one of his or her employees and has not made a practice of providing similar lodging to employees in the past will almost certainly be unable to claim that the lodging supplements the employee’s income for purposes of Ohio’s minimum wage requirements.  Of course, this means that any employer who is attempting to provide lodging as an income supplement for the first time may also be exposed to liability, so employers of all sizes should be advised of the Fourth District’s holding before initiating a lodging-

for-compensation program for the first time.

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