In Budget Compromise, PA Governor Tom Wolf Repeals 2020 Overtime Regulations
On Wednesday, June 30, 2021, Pennsylvania Governor Tom Wolf agreed to repeal the regulations expanding the ranks of lower-wage salaried workers who must receive time-and-a-half pay for any time they work over 40 hours in a week.
In 2020, The Pennsylvania Department of Labor passed regulations that were intended to benefit employees by increasing the minimum salary threshold from $684 per week to $780 on October 3, 2021, and $875 per week on October 3, 2022. Nevertheless, this increase will never see the light of the day.
Governor Wolf, known for being an advocate for the increase in minimum salary levels for exempt employees, had to sacrifice the employee-friendly regulations in order to maintain additional educational funding. According to the Pennsylvania Chamber of Commerce, the Republican-majority legislature and Governor Wolf reached a final 2021-2022 state budget deal last week which led to the reversal of the overtime rules.
Had the 2020 regulations been allowed to progress, 80,000 Pennsylvanians would have qualified for overtime pay due to the increased salary levels. Come October 3, 2021, however, not only will the minimum salary threshold remain under $780 per week, but it will be reduced from $684 to $455 per week, or $23,660 a year.
Note: The adoption of the state budget will not exempt Pennsylvania employers from the federal salary level.
Employers will continue to be bound by the provisions of the Fair Labor Standards Act (FLSA), which require employees to be paid a minimum of $684 per week and impose certain job duties requirements for the overtime exemption. Consequently, employers are encouraged to review their job descriptions to ensure that any employee classified as "exempt" meets the job duties requirement under the FLSA and remains properly classified.
If you have any questions about this update, your exempt employees, or any other labor & employment related issue, please contact one of our labor & employment attorneys, or call 814-459-2800.