In New York where the entry-level fast food workers earn $16,920 per year, the governor has convened a wage board to evaluate whether fast-food workers are adequately paid. In Hamilton County, fast-food workers average about $12,150 per year, but the governor is bound by the minimum wage rates set out in the Ohio Constitution.
A wage board will determine whether New York’s fast-food workers are adequately paid. The state’s minimum wage is $8.75 and will rise to $9 at the end of the year.
New York Governor Andrew Cuomo, in an op-ed published May 6 in the New York Times, called income inequality a national problem “that leaders at all levels of government are grappling with.” He said he would direct the labor commissioner to empanel a wage board to investigate wages for fast-food workers.
In the op-ed entitled Fast-Food Workers Deserve a Raise, the governor said the wage board will return in three months with recommendations. The recommendations do not require legislative approval.
To dispel the erroneous perception that fast-food workers are mostly teenagers who want to earn extra spending money, Cuomo cited a number of statistics about fast-food workers:
- 73 percent are women
- 70 percent are over the age of 20
- More than two-thirds are the primary wage earners in their family
- 26 percent are raising a child
- 52 percent have at least one family member on welfare
Cuomo calls the pay gap between CEOs and workers “extreme and obnoxious.” The average fast-food C.E.O. made $23.8 million in 2013, according to Cuomo, while entry-level food service workers in the state earned $16,920 per year. Since 2000, the average C.E.O. pay has quadrupled, while nationally, wages for fast-food workers increased just 0.3 percent.
The state labor commissioner defined fast-food workers as “those workers who prepare food and serve customers in limited service restaurants, where customers order at the counter and pay in advance.” This definition conforms to the industry code 722513 in the North American Industry Classification System.
Hamilton County Fast-Food Workers
Of the 446,696 paid workers in Hamilton County, 12,810 (2.8 percent) are fast-food workers according to 2013 County Business Pattern data from the U.S. Census Bureau. The total annual payroll for such workers, both full- and part-time, was $155.6 million, which equates to an average annual salary of $12,150.
Ohio Minimum Wage Law
Even if Governor Kasich shared Governor Cuomo’s concerns about wages for fast-food workers, he cannot, unlike Cuomo, circumvent the legislature to change the minimum wage. And he could not adjust wages for a segment of Ohio workers such as fast-food workers.
Minimum wage rates are fixed in the Ohio Constitution. Some are set by reference to the federal minimum wage rates. Others are adjusted annually effective January 1 based on inflation.
Non-Tipped Wages in Ohio
Most fast-food workers are paid the wage rates for non-tipped workers since they do not receive gratuities. In Ohio, non-tipped employees are to be paid no less than $7.25 per hour, the federal minimum wage, if their employers gross less than $297,000, or $8.10 per hour, the Ohio minimum wage, if their employers gross more.
About 32 percent of limited service restaurants (208 of 653) in Hamilton County have fewer than 10 employees and likely gross less than $297,000. Employees under the age of 16 are to be paid no less than $7.25 per hour, the current federal minimum wage.
Tipped Wages in Ohio
Ohio law provides that wages do not include gratuities except as provided by rules issued by the Director of the Department of Commerce. Such rules may be amended from time to time by the director.
In Ohio, the director considers tipped employees to be employees in occupations in which they “customarily and regularly” receive more than $30 per month in tips. Employers can elect to pay tipped employees the non-tipped minimum wage, in which case the employer can opt to keep all tips.
Alternatively, employers can elect to use what is called the tip credit provision, in which case tipped employees are paid $4.05 per hour plus tips. However, the employer must be able to show that tipped employees received at least the minimum wage when cash wages and the tip credit amount are combined.
By Mike Brown. Contact Mike at firstname.lastname@example.org.