As the public comment period on the Wolf administration’s proposed overtime rules drew to a close last week, a group of 15 Republican state lawmakers sent a letter to the state’s Independent Regulatory Review Commission that called the changes an “administrative nightmare” for employers.
“Employers of all types will have to engage in additional timekeeping and other record keeping to comply,” the letter states. “Also, employers will have to reclassify many employees and reorganize their operations upon implementation.” These facts are in line with the concerns that the PA Chamber and employers statewide expressed during the public comment period that ended on Aug. 22. These concerns mirror the swift, negative reaction that employers had a few years ago when the Obama administration issued proposed changes to overtime rules that were very similar to – but did not even go as far as – the Wolf administration’s proposal.
First announced by the Wolf administration in January, the proposal – which was unveiled by the state Department of Labor and Industry in June – would raise the wage threshold for “exempt status” to more than double what is currently set by the federal government; along with changes to “duties tests” that determine eligibility; and an automatic update to the salary threshold every three years. This would have an especially harsh impact among small businesses, nonprofit organizations, higher education institutions and the health service industry, among others.
The PA Chamber continues to speak out against this flawed proposal, which would harm Pennsylvania’s competitiveness and negatively impact workplace culture and morale, as employees would need 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. These impacts were noted in a letter the PA Chamber coordinated with various industry groups, which had urged the commission to extend the public comment deadline in order to give employers and the public more time to analyze the effect of the overtime changes and weigh in.
The proposal is currently pending with the Independent Regulatory Review Commission. Over the next several weeks, IRRC will review the feedback garnered from the public comment period before issuing a final ruling.