Pennsylvania’s new overtime rule took effect October 3, 2020 when the final, approved regulation was published in the Pennsylvania Bulletin. The final rule updates the salary threshold to reflect current wages paid to Pennsylvanians working in executive, administrative, and professional occupations. It also ensures that the duties tests for executive, administrative, and professional workers more closely align to those in the Fair Labor Standards Act’s (FLSA) federal overtime regulations.

To see the the previous salary thresholds and more information regarding the duties test, check out our prior blog post outlining overtime rules here.

What is Overtime and When Can I Get It?

When your employer requires or permits you to work hours outside of those that are your regularly scheduled hours, your employer is required to pay you a higher premium for this overtime work.  For covered, nonexempt employees, the Fair Labor Standards Act (FLSA) requires overtime pay at a rate of at least one-and-a-half times the employee’s regular rate of pay. This is equivalent to 150% of the employee’s hourly wage for each hour the employee works over 40 hours in a week.

To calculate this amount, employers must take two weeks’ salary and divide it by 80 hours to get what is considered the employee’s regular hourly rate.  Then, this amount is multiplied by 1.5, and multiplied again by the number of hours worked in two weeks exceeding 80 hours.

Employees covered by the Fair Labor Standards Act must receive overtime pay for hours worked in excess of 40 hours per week.  However, the FLSA does not require overtime pay for hours worked on Saturdays, Sundays, holidays, or regular days of rest, unless overtime hours are worked on such days.

The Fair Labor Standards Act also requires bonus payments to be included as part of an employee’s regular rate of pay when computing overtime.  But the FLSA does not mandate extra pay for weekend or night work. Rather, extra pay for working weekends or nights is a matter of agreement between the employer and the employee.

Overtime Practice Requirements and Prohibitions

The Fair Labor Standards Act applies on a workweek basis.  An employee’s workweek can be defined as a fixed and regularly recurring period of 168 hours (7 days x 24-hours), or seven consecutive 24-hour periods.

An employee’s pay period does not have to coincide with the calendar week.  In fact, it may begin on any day and at any hour of the day.  Often, different work weeks may be established for different employees or different groups of employees within the same company.

Normally, overtime pay earned in a workweek must be paid on the regular pay day for the pay period in which the wages were earned.  Averaging hours over two or more weeks is not permitted under the Fair Labor Standards Act.

If an employee is not paid overtime on pay day or if your employer averages your hours, you are entitled to file a private suit against your employer.  In this lawsuit, you may be eligible to recover up to two years of backpay and an equal amount as liquidated damages, plus attorney’s fees and court costs.  This amount increases to three years of backpay when the violation was willful.

It is also a violation of the Fair Labor Standards Act to discriminate against or fire an employee for filing a complaint with an employer or the Wage and Hour Division or for participating in a legal proceeding under the FLSA.  This is known as retaliatory termination.

FLSA Regulations Update

The FLSA regulations update that took effect Jan. 1, 2020, raised the federal overtime salary threshold to $35,568. While Pennsylvania’s overtime rule aligns more closely with the FLSA, Pennsylvania’s minimum salary threshold is set at $45,500. and the increase will be phased in three steps:

• o $684 per week, $35,568 annually (per federal rule), on Jan. 1, 2020
• o $780 per week, $40,560 annually, on Oct. 3, 2021
• o $875 per week, $45,500 annually, on Oct. 3, 2022

Starting in 2023, the salary threshold will adjust automatically every three years. Pennsylvania’s new overtime rules also allow up to 10% of the salary threshold to be satisfied by nondiscretionary bonuses, incentives, and commissions paid annually, quarterly, or more frequently. The state Department of Labor and Industry notified businesses operating in Pennsylvania of the new overtime rule.

Think You May Be Owed Overtime Wages?

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