Wednesday, June 27, 2018

New Proposed Pennsylvania Overtime Regs

Okay employers, do you remember President Obama's proposed overtime regs from 2016? The ones you were freaking out over? But then completely forgot about because a court enjoined them? Well, guess what? They're baaaack . . . potentially . . . sort of . . . in Pennsylvania.

Over the weekend, the Pennsylvania Department of Labor and Industry published a notice of proposed rulemaking that looks an awful lot like the proposed Obama regs.

Generally, employers must pay employees time-and-a-half for overtime (hours over 40 worked in a workweek). Many employees, however, are exempt from this overtime requirement under the white collar exemptions (administrative, executive, and learned professional). Each white collar exemption requires that the exempt employee perform certain primary duties. The new regs make some tweaks there.

The big change, however, will be the new salary requirements. All three white collar exemptions require that the employer pay the employee on a salary basis. And, currently, the employee must receive a minimum salary of $455/week under federal law. Under the new proposed Pennsylvania reg, that amount will increase incrementally over three years:
  • The minimum salary amount is increased to $610 per week on the effective date of adoption of the final-form rulemaking; 
  • To $766 per week 1 year after the effective date; and
  • To $921 per week 2 years after the effective date. 
After that, it will increase incrementally every three years to "a rate equal to the 30th percentile of weekly earnings of full-time nonhourly workers in the Northeast Census region in the second quarter of the prior year as published by the United States Department of Labor, Bureau of Labor Statistics."

This is gentler than the Obama reg, which would have just - BAM! - doubled the minimum salary requirement overnight.

The proposed Pennsylvania reg also "allows up to 10% of the salary amount to be paid by nondiscretionary bonuses, incentives or commissions" - a similar provision was in the Obama version.