Overtime Rules in Pennsylvania
Pennsylvania's Overtime Rule Has Been Abrogated; Federal Overtime Rule Still in Effect
As part of the 2021-2022 budget package, Act 70 became law on July 9, 2021, which amended the Administrative Code (P.L. 177, No. 175) to abrogate sections 231.82, 231.83, and 231.84 from the regulations for the PA Minimum Wage Act. Effectively, this means that unless future regulations are proposed and approved, the Bureau is unable to enforce provisions of the executive, administrative, or professional exemptions from the Minimum Wage Act.
However, federal regulations regarding exemptions for executive, administrative, and professional employees from overtime remain in effect. The United States Department of Labor (USDOL) published its revised final regulations concerning its overtime requirements under the FLSA on September 24, 2019. (29 CFR 541). (https://www.dol.gov/newsroom/releases/whd/whd20190924) The update in federal regulation included raising the salary threshold from $455 to its current level of $684 weekly (equivalent to $35,568 annually).
When there are differences between state and federal law or regulations, an employer should follow the law or regulation which provides the most protection to workers. Therefore, despite the changes made to the Pennsylvania overtime regulation in the 2021-2022 budget by Act 70, you should consult with the United States Department of Labor's Wage and Hour Division (WHD) at 1-866-487-9243 or www.dol.gov to learn more about their regulations on salaried employees.
Federal Overtime Rule (effective January 1, 2020)
An employee is entitled to at least minimum wage and overtime pay at time and a half for all hours worked over 40 hours per week. However, the federal Fair Labor Standards Act (FLSA) does not require overtime pay for "any employee engaged in a bona-fide executive, administrative, or professional capacity" who is paid on a salaried basis instead of an hourly wage and meets the minimum salary threshold defined in federal regulations. (29 U.S.C. § 213a(1).
The United States Department of Labor (USDOL) published its revised final regulations concerning its overtime requirements under the FLSA on September 24, 2019. (29 CFR 541).
The new federal regulations took effect on January 1, 2020.
The update to federal regulation includes:
- raising the "standard salary level" from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker); and
- allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level.