UPDATE ON OVERTIME REGULATIONS:
PENNSYLVANIA LIBERALIZES SALARY THRESHOLDS
COMPARED TO RECENT FEDERAL CHANGES
This follows up on our prior communications regarding changes to overtime requirements for employees. New Pennsylvania state regulations on the salaries of employees exempt from overtime will be more liberal during 2021 and 2022, and provide for more employees to receive overtime, than recent federal standards that were adopted in 2019 and became effective January 1, 2020. According to Governor Wolf, 82,000 workers who would not qualify for overtime under the recent federal standards will qualify for overtime pursuant to the new Pennsylvania regulations.
On January 31, 2019, the state Independent Regulatory Review Commission (“IRRC”) approved the Pennsylvania Department of Labor and Industry’s final regulations extending overtime pay eligibility. For 2020, the new state regulations, like the recently-adopted federal regulations, require overtime pay of time and a half to most full-time salaried workers in executive, administrative and professional jobs who make less than $35,568 ($684 per week). Non-exempt employees below the salary threshold must be paid overtime for hours worked in excess of 40 hours per week.
Unlike the recent federal regulations, though, the new Pennsylvania state regulations will increase the threshold salary amounts for exempt status in 2021 and 2022, as follows:
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- $40,650 annually for 2021 ($780 per week).
- $45,500 annually for 2022 ($875 per week).
In addition, unlike the recent federal regulations, the Pennsylvania regulations mandate that salary threshold calculations be updated every three years, beginning in 2023.
The new Pennsylvania regulations continue, as before, to align with federal regulations on the “duties test” used to determine whether an employee is exempt or non-exempt from overtime requirements. Also like the federal regulations, the new Pennsylvania regulations provide that up to 10% of the salary threshold can be met through payment of a nondiscretionary bonus, incentive or commission.
For public school employees, teachers and coaches will continue to remain exempt from overtime rules regardless of their salary levels. In addition, school “academic administrative personnel,” which includes certificated school administrators, will be exempt from overtime if they exceed the 2020 salary threshold of $35,568. The new Pennsylvania salary thresholds for exemption from overtime during 2021 and 2022 will apply to other public school employees who qualify under the duties test for one of the “white collar” exemptions.
The Attorney General must approve the final state regulation before they go into effect. The Attorney General’s Office has up to thirty days to review the regulations, and they will take effect upon being published in the Pennsylvania Bulletin.
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We hope you find this issue of KKLL’s Labor and Employment Law Watch helpful and informative. Please understand that the Law Watch is designed to provide information about current developments and required actions. If you have any questions regarding any labor and employment law matter, including the issues discussed in this newsletter, please do not hesitate to contact us at 717-392-1100, or email us at the following addresses:
KEGEL KELIN LITTS & LORD LLP
Labor & Employment Practice Group
(717) 392-1100
Clarence C. Kegel, Jr. kegel@kkll.law
Jeffrey D. Litts litts@kkll.law
Howard L. Kelin kelin@kkll.law
Benjamin L. Pratt pratt@kkll.law
Katie L. Summers summers@kkll.law
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