Late yesterday, the Pennsylvania Department of Labor & Industry (L&I) delivered its final rule to the Independent Regulatory Review Commission (IRRC) regarding overtime pay under the Minimum Wage Act. According to IRRC’s website, a public hearing on the final rule will be held on Thursday, November 21st.
The highlights of L&I’s final rule are as follows:
- Raises the salary threshold to $875 per week ($45,500 annually) – an over 92% increase over the current $455 per week ($23,660) – and there is an automatic escalator
- The employee still must meet both the salary test and the duties test to qualify as exempt.
All documents concerning L&I’s final Overtime Rule can be found below.
- Final-Form Rulemaking Package
- Notice of Final Rulemaking
- General Provisions
- Regulatory Analysis Form
- Comment and Response Document
If you recall, the Federal Department of Labor published its final rule on Friday, September 27th. The Federal rule:
- Raises the salary threshold from the current $23,660 ($455/week) to $35,568 ($684/week)
- Effective 1/1/2020
- No automatic updates or changes to the duties test
- Allow non-discretionary bonuses, incentive payments and commissions to satisfy up to 10 percent of the salary requirement
According to the Pennsylvania Chamber of Business and Industry (PA Chamber), Pennsylvania employers generally accept the Federal Department of labor’s final overtime rule as a reasonable update to overtime regulations and employers are unlikely to challenge the Federal final rule.
At a minimum, RCPA will be recommending that L&I’s rule should mirror the Federal rule, so it easier for businesses to comply with this requirement. RCPA will be working with the PA Chamber and other businesses on this issue.
In the meantime, please send me your initial thoughts/concerns by close of business on Monday, October 21st, because State House Leadership and Chairman Cox of the House Labor Committee would like to know what objections our members have about L&I’s final rule.
Questions, please contact Jack Phillips, RCPA’s Director of Government Affairs.