by Laura Pokrzywa
Pennsylvania employers take note . . .
We are watching a proposed change to the Pennsylvania Minimum Wage Act (PMWA) that would, among other things, significantly increase the minimum salary requirements for the white-collar overtime exemptions in Pennsylvania.
Experiencing a bit of déjà vu? You may remember similar changes to the federal Fair Labor Standards Act (FLSA) that almost became a reality for employers at the end of 2016. If not for an eleventh-hour intervention of a federal judge in Texas, employers in every state would have been scrambling to reclassify many of their employees.
How do federal and state wage and hours laws intersect?
The FLSA establishes minimum wage and overtime pay obligations for most employers across the country, while similar provisions in the PMWA only affect employers in Pennsylvania. As in any state, Pennsylvania employers must comply with the requirements of both state and federal law. So, though Pennsylvania’s current minimum salary requirement is just $250/week, Pennsylvania employers must comply with the higher federal standard currently set at $455/week ($23,660 annually).
So what exactly has been proposed in PA?
The state’s Department of Labor and Industry (DLI) has proposed the following changes:
- Minimum salary increases: Stepped increases in the minimum salary requirements that would make Pennsylvania one of a small group of states to establish a minimum salary requirement that exceeds the requirements of the FLSA. The first step would be implemented in 2020 and would increase the minimum salary required to meet the “white collar” exemption to $31,720 per year. Annual increases would follow, raising the minimum threshold to $47,892 by 2022, more than doubling the current federal requirement.
- Changes to the language regarding requirements to meet the “duties” tests: The proposal requires exempt executive employees to “customarily and regularly exercise discretionary powers” and exempt administrative employees to “customarily and regularly” exercise discretion and independent judgment with respect to matters of significance. Though the language in the Pennsylvania proposal is supposed to be similar in intent to the FLSA’s current requirements, subtle differences have legal experts concerned that PA employers will be facing confusion and frustration when trying to comply with both laws.
No need to panic just yet.
Before any changes can be made to the current law, the DLI has to officially publish the proposed rules and allow the public a 30-day comment period. We don’t expect issuance of any new rule in Pennsylvania until sometime next year and there is no predicting what the new rule may look like when all is said and done. We will be watching this one closely and keeping you informed.
If you are an employer with any HR concerns, please send an email to HRhelpline@eastcoastrm.com. If you have any questions about East Coast Risk Management and the services we offer, please visit our website (www.eastcoastriskmanagement.com) or call (724) 864-8745.
Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.