In one of its last remaining sessions of 2020, the Ohio Senate advanced two pieces of legislation that will positively impact the legal climate Ohio employers operate in. The bills – HB 251 and SB 243 – were both supported by the Ohio Chamber of Commerce because they give employers more certainty about their legal obligations.
In HB 251, the statutes of limitation for written and oral contracts are lowered to better align with the limitation statutes in other states. Under the bill, claims alleging breach of a written contract must commence within six years, while claims alleging breach of an oral contract must be brought within four years. As opposed to current law, which gives parties eight years to file a claim under a written contract and six years for an oral contract.
Shrinking the statute of limitation for both written and oral contracts is important because no matter how satisfactory a party’s contractual performance may have been, they must account for potential litigation since the other party retains the right to file a contract claim throughout the statutory period. A shorter statute of limitation also gives employers greater certainty about their potential liability, which frees up dollars that were once held aside in reserves to be used for other more beneficial purposes like reinvesting in their business, hiring more employees or supporting projects in their local communities.
Under SB 243, employers benefit by codifying into Ohio’s overtime statute important aspects of the federal Fair Labor Standards Act (FLSA). The bill mirrors this federal law by incorporating the FLSA’s Portal to Portal Act which states traveling to and from work and other preliminary or postliminary task are not compensable working time. Likewise, the bill makes the U.S. Supreme Court’s de minimis doctrine a part of Ohio’s overtime statute. This common law doctrine first established in 1946 clarifies that insignificant and insubstantial amounts of time beyond the scheduled work day is not compensable.
As more and more hourly employees are working from home in unsupervised settings, employers face the risk of potential litigation alleging they failed to properly compensate an employee despite having no knowledge the work was performed. SB 243 addresses this unreasonable risk of liability by incentivizing hourly employees to properly report all working time to their employer – which in turn, lowers the risk employers face for costly wage and hour lawsuits seeking back pay, damages and attorney fees for working time they did not know was performed. Following their vote on the Senate floor, HB 251 and SB 243 now await action by the Ohio House before becoming law. SB 243 faces long odds to being enacted this year since there must be a committee and floor vote on the bill before the end of the month, but HB 251 only needs a concurrence vote. The Ohio Chamber is urging the House to concur on the Senate amendments to HB 251 since the Senate removed amendments that are not germane to the legislation and can be accomplished in separate legislation next General Assembly.