Ohio Supreme Court Rules that Penalties for Prevailing Wage Violations are Mandatory

The Ohio Supreme Court has examined whether the statutory penalties for the underpayment of prevailing wages are mandatory. Ohio’s prevailing wage law provides that, in an employee-initiated suit, the underpaid employee “may recover” the difference between the fixed prevailing wage rate and the amount paid and a penalty equal to 25% of that difference. The law further provides that the person, firm, corporation, or public authority who failed to pay the fixed rate “also shall” pay a 75% penalty to the Director of the Ohio Department of Commerce. In the case of Bergman v. Monarch Construction Company, the Ohio Supreme Court determined that the phrase “may recover” refers not to whether the penalty is optional, but rather to the employee’s choice of whether to bring a lawsuit. Under the Court’s decision, in an employee-initiated action, the penalties are mandatory unless the violation resulted from specified exceptions (the exceptions being if the underpayment was the result of a misinterpretation of the statute or an erroneous preparation of the payroll documents, provided restitution is made). For the Ohio Supreme Court Opinion, see Bergman v. Monarch Constr. Co., Slip Opinion 2010-Ohio-622 (Decided March 2, 2010).

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