Pennsylvania Governor Seeks To Expand Overtime Pay To Currently Exempt Employees

Jackson Lewis P.C.

Frustrated by years of unsuccessful efforts to raise the minimum wage through the state’s Republican-controlled legislature, and in response to the recent federal court invalidation of the Obama-era DOL’s rule that would have doubled the minimum salary requirement for the executive, administrative and professional exemptions (i.e. the “white collar” exemptions) under the FLSA, Pennsylvania Governor Tom Wolf has proposed an increase in the minimum salary under corresponding state regulations for employees to satisfy the white collar exemptions.  Under current state law, the minimum salary requirement for these exemptions is only $250 per week, meaning that it has no practical impact, as the minimum salary requirement under the FLSA is $455 week or $23,660 a year.

A change to the state regulations would require approval only by a five-member board that currently has a Democratic majority (including the Governor himself), effectively bypassing the Republican legislature.  Under the proposal the first salary increase, to $31,720 per year, would be implemented in 2020.  Subsequent increases the following two years would raise the minimum salary threshold to nearly $48,000 by 2022.  While the approval process could take more than a year, if enacted the impact is expected to be monumental, affecting approximately 460,000 currently exempt workers in Pennsylvania.  Should these changes take place, Pennsylvania would join other states, such as New York and California, which have implemented a minimum salary requirement for the white collar exemptions exceeding that required by the FLSA.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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