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25 Apr

April 2022: Ohio Enacts Changes to Overtime Exemption Laws and Class/Collective Action Procedures

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11:25pm

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Update Applicable to:
All employers in the state of Ohio

What happened?
On April 6, 2022, Governor DeWine signed Senate Bill 47 (SB 47), thereby formally adopting Sections 2 and 4 of the Portal-to-Portal Act (PPA) amendments to the federal Fair Labor Standards Act (FLSA).

What are the details?
Effective July 6, 2022, SB 47 will formally codify the PPA’s exclusion of certain activities from the definition of compensable “work” under the FLSA. Under the new law, employers will not be required to pay overtime wages to an employee for time spent:

  • “Walking, riding, or traveling to and from the actual place of performance of the principal activity or activities that the employee is employed to perform,” i.e., normal commuting time;
  • “Performing activities that are preliminary to or postliminary to the principal activity or activities”; or
  • “Performing activities requiring insubstantial or insignificant periods of time beyond the employee’s scheduled working hours,” that is, de minimis.

The exclusion applies to any of the above activities when they occur before the time on any workday that the employee commences the employee’s principal work activity, or after the time on any workday that the employee stops performing the employee’s principal work activity.

However, the exclusion does not apply if the employee performs the activity:

  • During the employee’s regular workday or during prescribed hours;
  • At the employer’s specific direction;
  • Pursuant to an express provision of a contract in effect at the time, the employee performed the activity; or
  • Pursuant to a custom or practice applicable to the activity, in effect at the time of performance, and the custom or practice is not inconsistent with a contract in effect at the time the employee performed the activity.

Under SB 47, an employee shall not join a lawsuit alleging a violation of Ohio’s overtime law unless the employee gives written consent to become a plaintiff and file that consent with the court in which the lawsuit is brought. This requires that an employee “opt-in” to the lawsuit is consistent with the FLSA’s “opt-in” provisions for collective actions.

Notably, SB 47 eliminates the so-called “hybrid” collective/class wage lawsuits that combine both “opt-in” plaintiffs under the FLSA and “opt-out” plaintiffs under parallel Ohio state law claims. Under the “opt-out” process, employees are automatically included in the class unless they affirmatively state in writing that they do not want to participate in the lawsuit, which can significantly increase the size of a class.

For more information, please see the links below:

Senate Bill 47 (SB 47)

Article 1Article 2

What do employers need to do?
Employers should review the links provided above and should review their overtime policies regarding preliminary and postliminary work activities to ensure they are in compliance with the law.

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