Resources and Definitions
Frequently Asked Questions
What does the city of Toledo consider to be wage theft?
Wage theft can be broken down into three parts.
- A promise to pay
- Threats of retaliation for asking for your pay
- Misclassifying employees as independent contractors
Why does the city care about misclassified employees?
Proper classification protects employees from exploitation by ensuring they are fairly compensated for their work. It upholds workers' rights and prevents employers from underpaying workers, delaying wages, or making unlawful deductions.
What determines if someone is a true independent contractor or not?
There are several ways to determine if someone is an employee or not. The Internal Revenue Service (IRS) has one method, which is also used in the appeal process for our procedures, and the Department of Labor (DOL) has another method. Additionally, the TMC defines it as whether or not there is individual control, if it’s the prime purpose of the business, and if there's an opportunity for profit or loss.
What should a business do to make sure they are compliant?
Ensure proper classification.
Review the resources linked above, then contact wageandhour@toledo.oh.gov or 419-245-1197 to walk through a questionnaire. This will determine if they have employees or contractors.
If they don’t agree with our decision, or they would rather have the IRS determine if they should be employees, a business can file a SS-8 form with the IRS.
Complete tax documentation.
Submit a new business registration form. Establish payroll and withholding for all employees meeting the definition of employee.
Violations
If a business if found to be in violation, our division has an education first policy, we will work with the effected business to make sure that they can come into compliance and give them a reasonable amount of time to do so. As long as they come into compliance, they will not be subject to the fines and penalties allowed for under 545.22.
If an employee has also filed a complaint under the wage theft ordinance, we would take action to recover the lost wages and damages as allowed for under 545.22.
Received a violation?
Our team is here to help you achieve compliance and avoid further penalties. Here's what to do:
- Contact our office at 419-936-2020 to consult with our staff on what is needed.
- Establish payroll and withholding for all employees meeting the definition of employee.
- Provide proof of payroll and withholding being established to this office.
- Complete an acknowledgement form, attesting to the correction of the violation.
- Do not retaliate against any employee as a result of this investigation.
If you wish to refute this violation, please contact our office at 419-936-2020 to discuss what is needed.
Penalties and fines
A violation of wage theft under Section 545.22 is a misdemeanor of the first degree. Fines start at $250 and go up to $1,000 per violation. Every day counts as a separate violation for each employee, meaning fines accumulate quickly. Violators must compensate the compliance for expenses accrued during this investigation and may be sentenced to jail for a period ranging from three days to six months.
Businesses can be held responsible up to 3 years back if they have been filing taxes with Toledo and up to 6 years back if not. Businesses are required to keep payroll records for 3 years.