PA Chamber Urges Wolf Administration to Reconsider Overtime Expansion

From PA Chamber of Business & Industry

The PA Chamber issued a statement following the Wolf Administration announcing its plans to move forward with an overtime eligibility expansion proposal that would harm employers and employees at a time when they can least afford it.

The federal overtime annual salary threshold increased to $35,568 on January 1. Under the Governor’s plan, the threshold for Pennsylvania employees will increase to $40,560 on October 3, 2021 and $45,500 annually on October 3, 2022. Beginning in 2023, the threshold would be adjusted automatically every three years.

Pennsylvania’s Overtime Rule also allows up to 10 percent of the salary threshold to be satisfied by nondiscretionary bonuses, incentives, and commissions, paid annually, quarterly or more frequently.

In addition to the salary threshold update, Pennsylvania also updated the duties tests to more closely align with the U.S. Department of Labor’s regulations. Paying an employee a salary does not automatically make them exempt from overtime. The employee must also perform duties specified under the Rule.

Additional information is available on the Department of Labor & Industry’s website

“This proposal has been controversial since a federal version from President Obama was opposed by a large and diverse coalition and ultimately struck down by an Obama-appointed judge. An equally broad coalition of Pennsylvania employers spoke out when Gov. Wolf advanced a similar proposal,” PA Chamber President Gene Barr said.

“We urge the Governor to recognize that this policy cannot be considered in a vacuum: many employers most adversely impacted, including nonprofit organizations, colleges and universities, restaurants and small retailers, are also among those who have been hit hardest by the pandemic, business shutdown and economic fallout.  Imposing additional costs and removing workplace flexibility is detrimental to employers already struggling and just adds one more obstacle on Pennsylvania’s path to economic recovery.

“Given these factors and the unprecedented economic challenges the state is currently facing, we urge the Governor to consider the true impact of the proposal and stop it from moving forward.”