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What Ohio Employers Should Know About Timely Payment of Wages and Offsetting Employee Wages

In Ohio, the wage payment statutes in R.C. ch. 4113 set the rules for timely payment of wages (R.C. § 4113.15), and when an employer may legally make payroll deductions (R.C. § 4113.16).  Typically, most employers issue payroll checks every week or two weeks.  This practice is consistent with R.C. § 4113.15, which requires that wages be paid at least semimonthly (twice a month), unless a longer payroll period is customary in the trade or profession or a longer payroll period is established by contract or operation of law.  Other Ohio statutes permit payroll deductions that are otherwise required by law, such as tax withholdings, and deductions authorized by the employee for various types of health insurance and life insurance premiums, and the purchase of merchandise.

The issue of how long an employer may delay issuing a payroll check and whether wages can be offset most frequently arises when an employee quits or is terminated, though the question of offsetting wages also can occur during employment, if for some reason the employee has become indebted to the employer.  Common examples include employee purchases of uniforms, equipment by or merchandise through payroll deductions, advances to the employee of vacation days, sick days, or personal time off, and expense advances or even cash loans to the employee.  Situations can also arise where an employee has purchased personal items on a company credit card or for some other reason has become indebted to the company.

Employers also may want withhold the employee’s final paycheck or offset an employee’s wages when the employee has damaged the employer’s property (or has caused damage to property for which the employer may be held liable), or has engaged in some form of misconduct.  However, even if the employee does not dispute a debt obligation or responsibility for property damage, Ohio law prohibits an employer from withholding the payment of wages without employee authorization (health insurance, company merchandise, etc.) unless the deduction is required by law (i.e., child support, garnishments etc.).  Employers are also prohibited from withholding or offsetting wages because the employee has damaged tools, equipment or wares (breakage).  R.C. § 4113.19.

Key point:       final paychecks must be issued within thirty days of the regularly scheduled pay day for which the wages are due

Key point:        the employer’s obligation to pay “wages” includes “fringe benefits”, such as vacation pay, sick pay, holiday pay and severance pay

Key point:        employee authorizations for the deduction of wages should be in writing and must be revocable by the employee up to the time of payment (R.C. § 1321.31)

Key point:       even when the employee has authorized a deduction, the amount of wages that can be deducted is limited by minimum wage and hour laws, as well as other statutes such as R.C. § 2329.66 (wage garnishments)

Key point:       failure to pay wages in violation of R.C. § 4113.15 is a criminal offense pursuant to R.C. § 4113.99

There are many advantages to consulting with an attorney concerning vacation and paid time off policies, requests for wage advances or when considering whether to withhold wages.  Folkerth and Folkerth has substantial experience preparing employment policies and answering wage payment questions.

Disclaimer:  This article has been prepared by attorneys employed by this firm and is provided for general information purposes only to permit you to learn more about our firm, our services and the experience of our attorneys.  The information presented is not legal advice, may not be applicable or may be contrary to the laws of certain jurisdictions, is not to be acted upon as legal advice, may not be current, and is subject to change without notice.