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By: Christopher M. Curci
Employers may recall the Obama administration’s efforts in 2016 to increase the overtime rule salary exemption from $23,600 annually to $47,476 annually. By way of background, employers are required to pay overtime to employees who work over 40 hours in a given workweek. However, many “white collar” employees are exempt from the overtime rules if their salary is above the $23,600 annual threshold.
The Obama administration’s proposed changes in 2016 caused quite a hubbub, finding strong support from pro-employee groups and strong opposition from pro-business groups. Ultimately, the proposed changes were struck down by a federal court and the Presidential administration turned over to President Trump, largely mooting the issue.
However, Pennsylvania employers should be aware that Governor Wolf recently announced a similar change to Pennsylvania’s wage and hour laws as part of his “Jobs That Pay” initiative. Governor Wolf’s proposal calls for increasing the salary exemption to $31,720 annually in 2020, $39,832 annually in 2021, and $47,892 annually in 2022. Thereafter, the salary threshold will continue to increase every three years.
The Governor’s office estimates the proposed changes will increase the wages of 460,000 workers in Pennsylvania. While the proposed changes have not yet been passed and would not take place for some time, employers should always be aware of the potential for significant change in wage and hour laws. It is important that employers plan well in advance for such significant change to manage their own business finances and avoid costly wage and hour violations.
Christopher M. Curci, Esq., is a Pennsylvania and New Jersey Labor and Employment Attorney and member of Freeman Mathis & Gary’s Labor and Employment Law National Practice Section. He represents employers in litigation and advises clients on all aspects of employment law. If you need help with this or any other employment issue, he can be reached at [email protected].