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The Ohio Department of Commerce has determined that there are no exemptions for agriculture under Ohio's new minimum wage law.

Last fall voters approved a constitutional ammendment raising Ohio’s minimum wage to $6.85, and state legislation was enacted to codify the ammendment. Initially, some people had interpreted that the legislation, House Bill 690, included limited exemptions for agriculture from the state minimum wage.

Ohio Farm Bureau agrees with the Department of Commerce that there are no agricultural exemptions for businesses with gross receipts over $250,000 and employees that are age 16 and over. However, the organization disagrees with the department that smaller agricultural businesses or those with younger employees are not entitled to minimum wage exemptions.

"Ohio Farm Bureau is trying to get state officials to reconsider their interpretation of the constitutional ammendment so small businesses can have the flexibility they need to stay in business," said John Wargowsky, OFBF’s director of labor services and policy.

Currently, businesses that have employees under age 16 or have annual gross receipts of $250,000 or less for the preceding calendar year are not required to pay workers the state’s minimum wage but are required to pay the federal minimum wage established by the Fair Labor Standards Act (FLSA). The federal wage rate is now $5.15 but is going up to $5.85 starting July 24, 2007, $6.55 starting July 24, 2008 and $7.25 starting July 24, 2009.

Under the FLSA, some aquaculture and small agriculture businesses that employ few workers are exempt from paying the federal minimum wage. Ohio Farm Bureau believes these exemptions also should be in effect for Ohio’s minimum wage exemption but the Wage and Hour Bureau of the Ohio Department of Commerce disagrees. Its argument is that the state’s minimum wage constitutional amendment does not specifically say all sections of the FLSA should apply to the small business exemption – only that the wage rate applies.

"The Wage and Hour Bureau is only applying FLSA’s wage rate and is not honoring the limited federal ag exemptions," Wargowsky said. "We believe that is not what the constitution says."

Wargowsky noted that employers who have workers under 16 years old can pay a youth training wage rate of $4.25, as allowed under FLSA, instead of the state minimum wage. The training rate is only for the first 90 calendar days and cannot be used the next year for the same employee.

"This law is extremely complicated. It’s important that Ohio ag employers understand their requirements because there are steep penalties for paying below the required minimum wage," Wargowsky said.

If employers incorrectly pay workers lower than the required minimum wage, the penalty is the amount of pay owed plus "two times the amount of back wages." For example, if the state determines that a business owes a worker $1,000 in back pay, the business also will have to pay an additional $2,000, Wargowsky said.