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What’s the Difference? Wage and hour laws in Indiana, Kentucky and Ohio

With offices located in Indiana, Kentucky and Ohio, we regularly review handbook policies and provide advice on personnel matters in these states.  While some employers may be tempted to believe that laws affecting employment are primarily based on federal statutes (and are essentially the same), the truth is that they often differ, sometimes significantly, across state lines.

One area in which there are noticeable differences that have a regular, direct impact on employers is wage and hour laws. In an effort to help you understand some of these important differences, we have charted a sampling of them below. Although all employers in every state are subject to the Fair Labor Standards Act (FLSA), which establishes minimum wage and overtime requirements, states can (and often do) establish stricter standards or impose greater burdens on employers compared to federal law. To the extent state law is more favorable to an employee compared to federal law, it must be followed.

There are, for example, higher minimum wage requirements and longer meal and rest period requirements in some states. Further, states often provide minimum wage and overtime exemptions that differ from those available in other states or under federal law. Similarly, although the FLSA may be silent on a specific practice, some states may have enacted statutes or promulgated regulations in these areas, which must be followed. This can be particularly challenging for employers that operate facilities in multiple states.  Moreover, governmental entities, like counties, cities and towns, can also create ordinances that regulate the workplace, thereby creating more challenges for employers to maintain consistency and compliance, even among operations within a state.

As a short example, the following three areas reflect different requirements in Indiana, Kentucky and Ohio:

Wage and Hour Laws: State Comparison

Law

Indiana

Kentucky

Ohio

Minimum Wage $7.25 per hour for most employers (Indiana incorporates the federal minimum wage in most circumstances) $7.25 per hour (Kentucky incorporates the federal minimum wage in most circumstances) $7.70 per hour in most circumstances (Ohio’s $7.70 per hour minimum wage applies over the federal minimum wage in most circumstances)
Rest Breaks and Meal Breaks Indiana law does not require employers to provide employees (other than minors) with rest or meal breaks.Pursuant to the FLSA, any break that is longer than 30 minutes and during which the employee is relieved of duties can be unpaid (shorter periods must be paid). Kentucky employers must provide most employees with a paid rest period of at least 10 minutes during each four hours of work.Employers must provide most employees with a reasonable period for a meal between the third and fifth hour of a work shift. The meal period can be unpaid as long as the employee is relieved from all duties.Pursuant to the FLSA, any break that is longer than 30 minutes and during which the employee is relieved of duties can be unpaid (shorter periods must be paid). Ohio law does not require employers to provide employees (other than minors) with rest or meal breaks.Pursuant to the FLSA, any break that is longer than 30 minutes and during which the employee is relieved of duties can be unpaid (shorter periods must be paid).
Overtime Pursuant to the FLSA, there is no limit to the number of hours a non-minor can work daily or weekly. Further, the FLSA does not require employers to pay overtime for work under forty hours in a week. Generally, non-exempt employees must be paid at a rate of 1.5 times the employee’s regular rate of pay for each hour worked in each workweek over 40 hours.Because Indiana’s overtime requirements do not apply to most employees who are covered by the FLSA, the FLSA’s overtime exemptions effectively cover most Indiana employees. Indiana also maintains additional exemptions that are available in some situations.In certain circumstances, when strict statutory requirements are satisfied, employers may pay employees .5 times their hourly rates for overtime work (as opposed to 1.5 times their hourly rates). Pursuant to the FLSA, there is no limit to the number of hours a non-minor can work daily or weekly. Further, the FLSA does not require employers to pay overtime for work under forty hours in a week. Generally, non-exempt employees must be paid at a rate of 1.5 times the employee’s regular rate of pay for each hour worked in each workweek over 40 hours. Kentucky law mirrors the FLSA in many respects; however, many federal overtime exemptions do not apply to Kentucky employees, and Kentucky maintains several overtime exemptions that are not available under the FLSA. Further, in most circumstances in Kentucky, employers must also pay nonexempt employees overtime at a rate of 1.5 times their regular rate for all hours worked on the seventh day in a week, regardless of whether they exceed forty hours that week.In certain circumstances, employers may provide employees with compensatory time in lieu of overtime pay.In certain circumstances, when strict statutory requirements are satisfied, employers may pay employees .5 times their hourly rates for overtime work (as opposed to 1.5 times their hourly rates). Pursuant to the FLSA, there is no limit to the number of hours a non-minor can work daily or weekly. Further, the FLSA does not require employers to pay overtime for work under forty hours in a week. Generally, non-exempt employees must be paid at a rate of 1.5 times the employee’s regular rate of pay for each hour worked in each workweek over 40 hours.Ohio law mirrors the FLSA in most respects, and all federal overtime exemptions apply to Ohio employees.In certain circumstances, when strict statutory requirements are satisfied, employers may pay employees .5 times their hourly rates for overtime work (as opposed to 1.5 times their hourly rates).

 

Given the numerous potential differences affecting employers operating across state lines, care must be taken to ensure compliance with all legal requirements. Prudent employers should conduct an audit of their employment practices, which would include a review of employee handbooks, policies and procedures (as well as unwritten practices) in each locality, in order to ensure being in compliance with state-specific requirements. Bingham Greenebaum Doll LLP labor and employment attorneys in all of our locations are equipped to conduct this kind of audit and review for you. If you have questions, please contact one of the attorneys in our Labor and Employment Practice Group.

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