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Proposal in Pennsylvania to Change Overtime Threshold

November 12th, 2018

Philadelphia wage dispute lawyers report on the change PA wants for the overtime threshold.Many workers wrongly assume that the only staff eligible to receive overtime pay are hourly employees. In 2016, overtime pay for salaried employees made national news when the Obama administration proposed raising the threshold for salaried workers’ overtime pay. For many people, this was the first they were aware that more than hourly employees are entitled to overtime pay, a common misconception by employers as well. The federal proposal has not been implemented due to legal challenges and the change in administration, but the issue is on the table in Pennsylvania and could affect businesses and workers.

Both federal and state laws cover who is eligible for overtime pay but there are differences in the two standards. The federal Fair Labor Standards Act (FLSA) requires that if companies pay workers in any position less than $455 per week, they must pay overtime for hours beyond the 40-hour work week limit. The Obama administration had proposed a federal rule in 2016 under the FLSA that would cover more workers at a higher weekly salary limit, but it has not been implemented.

However, Governor Tom Wolf ‘s administration has proposed a new rule that would cover more workers under the state law, called the Pennsylvania Minimum Wage Act (PMWA). The proposal to amend the regulations was conceived during part of the Wolf administration’s Middle-Class Task Force to study whether the PMWA limit should be raised. The administration’s study noted that the Pennsylvania limit has not increased in 40 years.

What the Proposal Means

The new overtime regulations would raise Pennsylvania’s salary threshold and phase it in gradually. It would increase first to $610 per week, and after two years, to $921 per week, and would supersede the current federal regulations of $455 per week. As in other areas of wages, individual states may set these limits, which are permitted to differ from the federal limits. Another part of the proposal to change the 1977 state regulations would revise the tests used to determine which workers qualify based on their job duties and responsibilities, even if they exceed the salary level. Wage and exempt employee disputes under current Pennsylvania and federal law involve interpretations of the differing regulations and often require the experience of a qualified wage dispute attorney.

Pennsylvania private and public sector employers under this state proposal would be required to comply. At a hearing of the Pennsylvania House Labor and Industry Committee in September 2018, competing narratives were presented by the Department of Labor and Industry Secretary, along with staff, and private industry witnesses. The sides presented in this initial committee hearing had differing interpretations of the effects this proposal would have on raising wages for employees versus the effects on businesses’ bottom line. Currently, the proposal has not proceeded further in the Pennsylvania General Assembly, but will likely be revisited in a new legislative session.

Philadelphia Wage Dispute Lawyers at The Gold Law Firm P.C. Advise on Employment Law Matters

If you are an employee that has an issue with your wages or another employment matter, the Philadelphia wage dispute lawyers at The Gold Law Firm P.C. are skilled in representing employees with wage issues. Please contact us for a free consultation via our online form or call us at 215-569-1999 today. Located in Philadelphia, we serve clients from the surrounding areas, including Bucks County, Chester County, Delaware County, Montgomery County, and throughout New Jersey.

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