Ohio minimum wage could increase by over $4 in coming years

Two proposals, with differing approaches and timelines, aim to raise Ohio’s minimum wage, currently at US$10.45, as reported by NBC4 on May 6, 2024.

The first proposal involves Senate Bill 256 which outlines a phased approach to elevate the minimum wage over a period of four years as follows:

• US$12.00/hour by the beginning of 2025
• US$13.00/hour by the beginning of 2026
• US$14.00/hour by the beginning of 2027
• US$15.00/hour by the beginning of 2028

The bill also mandates that tipped workers receive a minimum of US$7.50 an hour by 2028, up from the current US$5.25. If an establishment cannot demonstrate that a tipped employee earns at least US$15 an hour with tips, the employee’s wage will be adjusted to compensate for the difference.

Additionally, SB256 proposes a refundable Earned Income Tax Credit (EITC), functioning as a wage subsidy. Although the process involves administrative procedures to claim the refund, the EITC is suggested to provide businesses with flexibility to adapt to the prescribed wage increases over the four-year period.

Simultaneously, a second initiative, led by One Fair Wage Ohio, aims to put the decision of increasing the minimum wage to US$15 per hour for both tipped and non-tipped employees by 2026 in the hands of voters.

For this, One Fair Wage Ohio aims to collect 413,000 valid signatures by July 3 to place the proposal on the November ballot. Should they fail, it is suggested the legislature might still pursue alternative measures, indicating a joint resolution to introduce a competing proposal.

While some businesses may support the initiative, others, especially smaller ones with tighter payroll margins, prefer a gradual approach aligned with inflation. Arguments contend that the market often autonomously adjusts wages without the need for legislative intervention.