Employment Law Daily Minimum wage constitutional amendment retained FLSA exemptions, so sales reps excluded from ‘employee’ definition
News
Tuesday, March 22, 2016

Minimum wage constitutional amendment retained FLSA exemptions, so sales reps excluded from ‘employee’ definition

By Ronald Miller, J.D. The definition of the term “employee” as set forth in the Ohio Fair Minimum Wage Act, R.C. 4111.14(B)(1), did not clearly conflict with or restrict the definition of the same term as set forth in the Ohio Constitution, Article II, Section 34a, ruled a divided Ohio Supreme Court. To be entitled to minimum wage, an individual must be an “employee.” Here, the state high court concluded that FLSA exemptions were to be considered when determining if an individual was an “employee.” As sales representatives, the plaintiffs met the requirements for the outside salespersons exemption, and so were not employees. Justice O’Neal, joined by Justice Pfeifer filed a separate dissenting opinion. (Haight v. Minchak, March 17, 2016, Lanzinger, J.). This case involved the applicability of Ohio’s minimum wage law, R.C. 4111.14(B)(1), to sales representatives. The employees here were sales reps who solicited advertising business for a magazine. Although they were to be paid a commission, they claimed the employer stopped paying or reduced the amount of the draw for certain sales reps—those who had been with the company for a certain amount of time or were underperforming. According to the employees, the draw that was available to a sales rep who failed to earn a commission fell below the minimum wage mandated by the Ohio Constitution, Article II, Section 34a. Constitutional claim. The employees filed a class action seeking a declaration that certain provisions of R.C. 4111.14 were unconstitutional and an injunction against the employer for engaging in unlawful employment practices, among other claims. The employees argued that they were entitled to the minimum wage. They asserted that because R.C. 4111.14(B)(1) contains exemptions from the definition of “employee” that Article II, Section 34a of the Constitution does not contain, the statute is unconstitutional. Alternatively, they argued that R.C. 4111.14(B)(1) does not apply to claims for minimum wage violations brought under the Constitution. A trial court declared that R.C. 4111.14(B)(1) is constitutionally valid and that exemptions within the statute apply to claims brought under Article II, Section 34a. A court of appeals reversed, concluding that the state legislature exceeded its authority when it defined “employee” differently, and more narrowly, than did the Constitution. This appeal followed. Voter approval. On appeal, the Ohio Supreme Court had to determine whether the statutory definition of “employee” under R.C. 4111.14 was unconstitutional and invalid because it defined that term differently, and more narrowly, than did the Constitution. In November 2006, Ohio voters approved the Fair Minimum Wage Amendment to the Ohio Constitution, which establishes a minimum wage rate that employers must pay their employees, and requires annual adjustments of that amount. Shortly thereafter, the legislature enacted implementing legislation. In accordance with Article II, Section 34a, the terms “employer,” “employee,” “employ,” “person,” and “independent contractor” have the same meaning as in the FLSA. Thus, in construing those terms, due consideration and great weight is to be given to interpretations of the United States Department of Labor and federal courts. Exemptions. The issue here was whether the exemptions set forth in 29 U.S.C. Section 213 were also properly exempted from the statutory definition of “employee” under Article II, Section 34a. The employer argued that the entire FLSA is incorporated into Article II, Section 34a. On the other hand, the employees contended that constitutional amendment incorporated only the definition of “employee” that appeared in 29 U.S.C. §203. As an initial matter, the Ohio Supreme Court observed that both Article II, Section 34a and R.C. 4111.14(B) state that the term “employee” shall have the same meanings as provided in the FLSA. Further, the constitutional amendment states that “employer” and “employee” have the same meanings as under the FLSA. The constitutional provision’s use of the plural term “meanings” indicated that the entirety of the FLSA is to be considered when determining who is covered under its protections. Thus, the high court concluded that Article II, Section 34a did not preclude the incorporation of the FLSA exemptions. Terms such as “employee” are to be defined consistently with the definition in federal law—this necessarily includes exemptions. As a result, the Ohio Supreme Court held that the meaning of the term “employee” under R.C. 4111.14(B)(1) was constitutionally valid. Dissent. In a dissenting opinion, Justice O’Neal, joined by Justice Pfeifer, argued that the court of appeals got this case right. The dissent observed that the exemption found in the federal minimum-wage law for outside salespersons, and other exemptions, were not included in Ohio’s constitutional amendment. Thus, he argued that by incorporating into Ohio law the exemptions set forth in the federal law, the state legislature modified the decision of the voters of the state and impermissibly narrowed and restricted the meaning of the word “employee” in the amendment. Accordingly, the dissent urged that that portion of the statute should be declared unconstitutional.

Interested in submitting an article?

Submit your information to us today!

Learn More