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By: Justin Boron
Going forward, Pennsylvania employers should be wary of relying on federal rules for their pay policies.
As a general principle, courts and regulators interpret Pennsylvania’s wage and hour laws consistently with the Fair Labor Standards Act. But the Pennsylvania Supreme Court called this principle into question when it held that the fluctuating workweek method of calculating pay—which federal regulations expressly authorize—is not permitted under the Pennsylvania Minimum Wage Act. See Chevalier v. Gen. Nutrition Ctrs., Inc., 220 A.3d 1038 (Pa. 2019).
The fluctuating workweek allows employers to meet their overtime obligations to nonexempt employees—under certain conditions—by paying the employee a fixed salary for fluctuating hours and paying a rate of at least one-half of the regular rate of pay for the hours worked each workweek in excess of 40. See 29 C.F.R. 778.114(a). But because the Pennsylvania wage law is silent on this issue, the Pennsylvania Supreme Court concluded that this method of pay calculation was not available.
The ruling itself is not breaking new ground. Several Pennsylvania federal courts had previously held that the fluctuating workweek was not available under Pennsylvania law. But it sounds a note of caution to Pennsylvania employers and their advisors about assuming that Pennsylvania wage law will agree with the FLSA and the regulations interpreting it.
It also could be a harbinger for shifts in interpretation of state wage laws in light of the DOL’s new proposed wage rules or rollbacks. In fact, the Chevalier ruling came just weeks after the DOL proposed a revised version of the fluctuating workweek aimed at clarifying its application and potentially expanding its use under federal law.
If you have any questions or would like more information, please contact Justin Boron at [email protected].