The PA Department of Labor & Industry (L&I) amended the Minimum Wage Act to clarify requirements and update salary thresholds to reflect the current wages paid to Pennsylvanians working in executive, administrative, and professional occupations.
The federal Fair Standards Labor Act took effect on January l, 2020 raising the federal overtime salary threshold to $35,568.
Pennsylvania’s Overtime Rules align with the federal Fair Standards Labor Act; however, L&l’s rules have set the minimum salary at $45,500 and the increase will be phased in over three steps:
•$684 per week, $35,568 annually (per federal rule), on January 1, 2020;
• $780 per week, $40,560 annually on October 3, 2021; and
• $875 per week, $45,500 annually on October 3, 2022.
Starting in 2023, the salary threshold will adjust automatically every three years.
Pennsylvania’s Overtime Rules also allow up to 10 percent of the salary threshold to be satisfied by nondiscretionary bonuses, incentives, and commissions, paid annually, quarterly or more frequently.
In addition to the salary threshold update, Pennsylvania also updated the duties tests to align with the U.S. Department of Labor’s making it easier for employers to comply with the law and for employees to know if they should be classified as an exempt or non-exempt executive, administrative, or professional employee. As has always been the case, paying an employee a salary does not automatically make them exempt from overtime. The employee must also perform duties specified under the Rule. The Pennsylvania Department of Labor and Industry (DLI) indicated that the proposed changes to the duties test were designed to better align the state’s law to the test under the FLSA. However, according to Jennifer Betts, an attorney with Ogletree Deakins in Pittsburgh, the proposed changes do not fully accomplish this objective. Some key differences noted are that the proposed changes:
Please visit www.dli.pa.gov/overtime for more information.
Source: PA Overtime Employer Fact Sheet ; SHRM.org