The wage-and-hour pendulum has once again shifted in the Commonwealth of Pennsylvania.
Nerdiest. Pendulum. Ever.
Salary-level test changes.
Back in October, I blogged about how Pennsylvania, yes Pennsylvania, had announced new overtime rules that are more generous than federal law. On January 1 of this year, Pennsylvania raised its salary-level threshold for overtime exemptions to $684 per week, $35,568 annually. In plain English, just like under federal law, if you have a salaried employee who makes less than $684 per week, then that employee will be eligible for overtime if s/he works more than 40 hours per week.
Under federal law, that $684/week number won’t change in 2021. However, in PA, that will go up to $780 per week, $40,560 annually in 2021; and $875 per week, $45,500 annually in 2022, extending overtime eligibility to 143,000 workers in three years.
Then in November 2019, the Pennsylvania Senate passed Senate Bill 79, which would raise Pennsylvania’s hourly minimum wage rate (currently $7.25) as follows:
- $8.00 effective July 1, 2020
- $8.50 effective January 1, 2021
- $9.00 effective July 1, 2021
- $9.50 effective January 1, 2022
The minimum wage hike was the compromise between the Senate and Governor Tom Wolf instead of the changes to the salary-level test. The Senate bill also would have eviscerated this recent Pennsylvania Supreme Court decision banning the fluctuating workweek method for calculating overtime under state wage and hour law.
Everything was looking peachy.
The kibosh on the kibosh.
Except, House Republicans balked at the deal. So, back in December, the proposed hike to the salary-level test was placed back onto the January 2020 Independent Regulatory Review Commission agenda. And the Commission has approved it.
So, unless the House changes its tune, another deal can be brokered, or a lawsuit gets filed, the state attorney general will review (and approve) the rule. In about a month or so, it will take effect.
And, like that fire drill employers nationwide endured in 2016 when the feds threatened to raise the salary-level exemption to $47,476, Pennsylvania employees will need to prepare now for a similar eventuality.