Back in the summer months, the Pennsylvania Department of Labor and Industry (DLI) released proposed revisions to the Pennsylvania Minimum Wage Act overtime exemptions (currently set at $250 per week or $13,000 per year). The proposal recommended increasing the state overtime exemption threshold in each of the next three years with the first increase in 2019 to $610 per week ($31,720 per year). The threshold would increase again in 2020 to $766 per week ($39,832 per year); and finally, to $921 per week ($47,892 per year) in 2021. Thereafter, the salary threshold would be set to the 30th percentile of weekly earnings for full-time salaried workers in the Northeast census region and would change every three years. Public comments were submitted over the past months to the state’s Independent Regulatory Review Commission (IRRC) and the agency recently released its own conclusions on the proposal, specifically expressing a concern that it doesn’t align the state with federal regulations, eliminating a number of existing federal exemptions (highly compensated employees, outside sales, business owners, etc.). Further, the IRRC cites a potential negative economic impact concluding that employers will likely not increase salaries to the proposed levels and instead would convert currently-exempt salaried workers to hourly workers or lay off employees. IRRC also noted that the US Department of Labor is also revising the federal exemption threshold and suggests delaying the state revision until the federal rules are finalized. It remains to be seen if IRRC concerns will be addressed in revisions to the final regulation.
