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Business leaders have an opportunity to make their voice heard on a critical employment issue. The public has until July 23 to provide feedback to state regulators regarding proposed changes to Pennsylvania’s overtime eligibility rules, which were unveiled by the Dept. of Labor and Industry a few weeks ago (UPDATE: the deadline to submit comments is now Aug. 22 following a 30-day extension being granted). The changes include a wage threshold for “exempt status” that is more than double the current rate set by the federal government. There would also be significant revisions to so-called “duties tests,” which are also used to determine eligibility. Finally, the rule would establish an automatic update to the salary threshold every three years beginning in 2023.
It was only a few years ago, during the Obama administration, that such changes were proposed at the federal level. At that time, the reaction from employers was swift and deeply negative, particularly among small businesses, nonprofit organizations, higher education institutions and the health service industry, among others. At that time, employers not only described significant increases to the cost of providing services or doing businesses, but also the reality that this dramatic change would damage workplace culture and morale, as employees would have to be shifted from earning a salary to being paid by the hour. This transition typically requires employees to start clocking in and out, along with more burdensome record-keeping, less flexibility, a rigid work schedule and fewer training opportunities and benefits. Following this outcry, the proposal was ultimately struck down by a federal court.
The PA Chamber is encouraging employers to speak out against this flawed proposal now being pursued at the state level, which would further harm Pennsylvania’s competitiveness. Visit our website to learn more about this important issue and write an email to the Independent Regulatory Review Commission, which has the power to reject or require changes to the proposed rules. The PA Chamber is also leading a coalition urging the commission to extend the public comment period deadline, to allow employers and the public in general enough time to analyze the full impact of the proposed rules on their company and submit comments.
Want to learn more about how the proposed new rules could impact your employees and your business’ bottom line? Sign up today for a free webinar that will explore the consequences of the overtime changes. At 11 a.m. on Thursday, July 19, employment defense attorney Joshua C. Vaughn will cover the breadth of these changes; how employers can start planning for compliance; which employees will be eligible for overtime under the new standards; how to convert their status from salaried to hourly; and more.