As of October 3, 2021, any employee in Pennsylvania classified as exempt under a white-collar exemption that has a minimum salary requirement who earns less than $780 per week would have needed to receive a salary increase to at least equal this amount or be reclassified as non-exempt (and made eligible for overtime pay) going forward. Federal law establishes a minimum salary of $684 per week for the professional exemption. Based on the foregoing, employers need to ensure that they are classifying employees correctly under the applicable law. (29 CFR 541). Most salaried employees who do NOT perform executive, administrative, or professional duties are eligible for overtime regardless of how much they are paid. The following employees are exempt from Arizona's minimum law: individuals who provide babysitting services on a casual basis at the residence their employer. At least 1.75 times the minimum wage, or $1,101.80 per week ($57,293.60 per year), At least 2.0 times the minimum wage, or $1,259.20 per week ($65,478.40 per year). For example, the rule does not: Pennsylvania employers have one year to prepare for a new state salary threshold that significantly exceeds the FLSA standard. On October 3, 2022, the threshold will increase to $875 per week or $45,500 annually. No, this updated regulation will not change overtime pay calculations for hourly employees. Effective July 24, 2009, the federal minimum wage is $7.25 per hour. Employers should watch these new laws carefully. Need help with a specific HR issue like coronavirus or FLSA? Usage is subject to our Terms and Privacy Policy. A hotel housekeeper's tip-producing work includes cleaning hotel rooms. If all employees are paid at least the state minimum wage of $7.25 or higher, tip pools may include both tipped and non-tipped employees. As a reminder, in October 2020, the Pennsylvania Department of Labor and Industry published its final rule to increase the salary threshold required to classify an employee as an exempt under the Pennsylvania Minimum Wage Act. Option 1: If an employer structures the bonus to be 10% of the employees weekly salary, then the regulations state that regular rate for salaried employees is all remuneration paid to the employee in the workweek divided by 40 hours. Examples of tip-producing work include, but are not limited to: a server's tip-producing work includes providing table service, such as taking orders, making recommendations, and serving food and drink. For those who don't receive health benefits at their jobs, their starting wage will be $10.50/hr. For example, the rule does not: Pennsylvania employers have one year to prepare for a new state salary threshold that significantly exceeds the FLSA standard. For example, New York's minimum wage law is focused on reaching the $15.00 threshold. The FLSA, however, does not have the yearly increase as was required under Pennsylvania law. PAs regulations allow for two types of tips: Tip pools including employees who are paid a minimum wage lower than $7.25 per hour may only includeemployees who customarily and regularly receive tips. A Pennsylvania lawmaker has proposed raising the minimum wage to $15 an hour. The rule increased the threshold for an exempt employee to $684 per week ($35,568 annually) effective Oct. 3, 2020; $780 per week ($40,560 annually) effective October 3, 2021; and to $875 per week ($45,500 annually) effective October 3, 2022. Although, this subsequently fell through and there are yet to be talks of another . The final regulation also makes modest revisions to the duties test, designed to more closely align the PMWA with its FLSA counterpart. The FLSA also increased its salary threshold for exempt employees to $684 per week ($35,568 annually), so employers will continue to have to meet that standard to classify employees as exempt under the executive, administrative or professional exemptions. Directly supporting work: For 90 minutes at the start of her shift and 90 minutes after the pub closes each night, Janet slices and pits fruit for drinks for the next days service, wipes down the bar and tables in the bar area, cleans bar glasses, arranges bottles in the bar, retrieves liquor and supplies, cleans ice coolers and bar mats, makes drink mixes, and vacuums under the tables in the bar area. $684 per week ($35,568 annually) effective Oct. 3, 2020. While we take all precautions to ensure that the data on this site is correct and up-to-date, we cannot be held liable for the accuracy of the labor law data we present. The regular rate for salaried employees who are not exempt from overtime is all remuneration paid to the employee divided by 40 hours. Option 2:But if bonus is structured to be a percentage of salary plus overtime, then, $500 salary + $187.50 overtime pay = $687.50. 541.500). Failure to display a Pennsylvania labor law poster in the workplace can result in severe fines. Minimum Wage for Employers with 25 Employees or Less. Examples of Overtime Pay Calculations for Employees Who Work a Fluctuating Work Week. The United States Department of Labor (USDOL) Minimum Wage. The minimum wage in Pennsylvania is set on par with the federal minimum wage, so if the federal minimum wage increases, so will Pennsylvania's minimum wage. This is a 28% increase above the current $684 per week level and a 92% increase above the 2019 minimum salary threshold. InFact Sheet 17U, the Wage and Hour Division of the United States Department of Labor explains that incentive compensation that is announced to employees in advancee.g., production bonuses and commission payments based on a fixed formulaqualify as nondiscretionary payments. That, however, is possible bad news for employers best left for another day. Meet Issa, who works as a bellhop and works 35 hours a week (seven hours a day, five days a week) at a hotel. 541.500); adopt the streamlined test for the EAP exemptions applicable to highly compensated employees (29 C.F.R. Independent Contractors Under New Jersey Overtime Law Include any version of the FLSA's regulation exempting computer professionals who are paid on an hourly basis (29 C.F.R. 2 Poverty line for a family of two in the lower 48 published 2016 by the U.S. Department of Health & Human Services. Under the approved changes, the minimum pay a salaried worker must receive to be considered exempt would increase incrementally to 2.5 times the state minimum wage by 2028. published its revised final regulations concerning its overtime requirements under the FLSA on September 24, 2019. 541.602 - .606); and. The new minimum salary for employees who otherwise qualify to be exempt . Thus, on December 1, 2016, this requirement increased from $23,660 annually ($455 weekly) to $47,476 annually ($913 weekly). temp_style.textContent = '.ms-rtestate-field > p:first-child.is-empty.d-none, .ms-rtestate-field > .fltter .is-empty.d-none, .ZWSC-cleaned.is-empty.d-none {display:block !important;}'; And $16.20 per hour for the remainder of New York State, effective December 31, 2022. The regular rate of pay cannot be less than the Pennsylvania minimum wage, which currently is $7.25/hour. Automatic three-year minimum salary adjustment. Photographs are for dramatization purposes only and may include models. Enter your email address below and click Sign up. $1,000 weekly salary + $200 variable bonus = $1,200, $1,200 weekly pay / 40 hours = $30 per hour, Overtime Pay: $30 regular rate x 6 hours of overtime x 1.5 (time and one-half) = $270, Weekly Pay: $1,000 weekly salary + $200 variable bonus + $270 overtime pay = $1,470. View Sitemap. The compliance tools you need to keep your jobsites and work zones safe and compliant with OSHA standards. Please confirm that you want to proceed with deleting bookmark. In June 2021, Governor Wolf agreed to repeal the final rule relating to the threshold increases in exchange for additional funding for public schools. The USDOL provides information on its The state minimum wage also governs the exempt employee threshold salary, which has increased accordingly. 2020 $9.45. the number of hours worked daily and weekly by employee. We do not often have good news to report for Pennsylvania employers in this blog. Build specialized knowledge and expand your influence by earning a SHRM Specialty Credential. The employee is owed $2,062.50 for that week of pay including their $1,000 weekly salary, $500 in commissions, and $562.50 overtime pay. When an employee is paid on a salaried basis, the regular hourly wage rate is found by dividing the employee's total earnings by 40 hours. 2. The bill was introduced in 2021, and looming fall elections could incentivize Congress to bring it up for a vote. The salary threshold will then be increased every three years thereafter, i.e., October 2026, October 2029, etc. Please note, the variable production bonus affects the regular rate of the 4th week because that is the week the bonus is paid. Proudly founded in 1681 as a place of tolerance and freedom. (29 U.S.C. Even now, however, the above differences between the PMWA and FLSA regulations mean that potential traps already exist for unwary employers that comply in good faith with the FLSA but fail to ensure that their EAP employees also qualify as exempt under the PMWA. The bill should have separate lines for the 18% service charge and for the patron to provide a tip or gratuity if they so desire. Attorneys. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. Any employee under eighteen working less than 650 hours per year for their employer is exempt from the minimum wage. Keystone State. Can an employer refuse to pay an employee for overtime for hours that have they have worked? If the employer takes a tip credit, it must pay Sofia not less than $2.83 per hour in cash wages; with tips, Sofia must still make at least the minimum wage of $7.25 per hour. Her employer must pay her a direct cash wage equal to at least the minimum wage for the time spent performing non-tip generating duties over the eight hours mark, therefore Janet gets paid the full minimum wage for seven hours total per work week (15 hours of non-tipped directly supporting work the eight hours that are the 20% threshold = 7 hours of time she must be paid the full minimum wage). Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. (20% of 40 hours = 8 hours). Youths who work over 650 hours per year are entitled to the regular minimum wage. Computer software employees may be paid on an hourly or a salary basis in order to qualify for exemption from California's overtime requirements. At least for the time being. Basic Minimum Rate (per hour): $15.50 Any work in excess of eight hours in one workday, in excess of 40 hours in one workweek, or in the first eight hours worked on the seventh day of work in any one workweek shall be at the rate of one and one-half times the regular rate of pay. var temp_style = document.createElement('style'); $101,250 for those who meet the duties-requirements for HCE employees. Those working at the Pennsylvania minimum wage of $7.25 an hour will get $10.88 per overtime hour. Box 1312 Wilkes-Barre, PA 18703, New PA Overtime Exemption Minimum Salary Requirements Repealed in State Budget Deal, Lethal Violence: Trends & Preparation for Encountering Threats, We previously wrote about these regulations, but those regulations ultimately were blocked by a federal court, $780 per week ($40,560 annually) on October 3, 2021; and. Pennsylvania employers may not pay you under $7.25 per hour unless you or your occupation are specifically exempt from the minimum wage under state or federal law. individuals employed by a small business, which includes . DOT compliance made easy vehicle safety, truck driver safety, ELogs, hazmat, FMCSA compliance and more. This article focuses exclusively on the new rules for salaried nonexempt employees. So employees thrive. Follow us on Facebook (opens a new window), Follow us on Twitter @JJKeller (opens a new window), Follow us on LinkedIn (opens a new window), Subscribe to our YouTube channel (opens a new window), Skip global navigation and go to main content, J. J. Keller Encompass Fleet Management System. Last week, the employee worked 50 hours, including 8 hours after 6:00pm. In October 2020, the Pennsylvania Department of Labor and Industry (DLI) published its final rule to substantially increase the salary threshold for qualifying as an exempt EAP employee under the PMWA to: $684 per week ($35,568 annually) effective October 3, 2020; $780 per week ($40,560 annually) effective October 3, 2021; and Many states have their own salary and duties tests for determining whether an employee is exempt from overtime under state rules. The PMWA and FLSA both place minimum wage and overtime pay obligations on Pennsylvania employers. Cleaning the dining room or bathroom is not part of the tipped occupation of a bartender. 541.103-105). It has 37 cosponsors in the Senate and 201 cosponsors in the House. Directly supporting work: Miguel also refills salt and pepper shakers and condiment bottles, rolls silverware, folds napkins, and vacuums under tables in the dining area. Last week, the employee worked 50 hours and earned $500 in commissions. 541.601). J. J. Keller protects people and the businesses they run. Salary level increase for exempt employees. $875 per week ($45,500 annually) effective Oct. 3, 2022. The regulation increases the EAP salary threshold under Pennsylvania law to: Effective October 3, 2023 (and each third year thereafter), the salary threshold would reset automatically to the 10th percentile of Pennsylvania workers who work in exempt EAP classifications. How much must they be paid for that week? The employer can take a tip credit for 32.5 hours of Issas 35-hour workweek, because she performs the tip-producing work of assisting guests with luggage and because her amount of directly supporting work does not exceed 20 percent of her weekly hours (20% of 32.5 hours = 6.5 hours) in which Issa is engaged in a tipped occupation. Duties that directly generate tips include (but are not limited to) taking orders, serving food and drinks, preparing alcoholic beverages, bussing tables during the meal service, making recommendations, processing payments. For these employees, CalHR approves the salary range for each position and determines any annual increase. Businesses that provide banquets, special function, or package deals must provide patrons with contracts and menus with a statement that explains that services fees are not gratuities. In addition, the Minimum Wage Act provides penalties for noncompliance. The Pennsylvania minimum wage poster, and additional required Pennsylvania labor law posters, are also available on the Pennsylvania labor law posters download page. 1130 12th Ave., Suite 200 Altoona, PA 16601-3486 Phone: 1-877-792-8198 or 814-940-6224, 1301 L&I Building 651 Boas St. Harrisburg, PA 17120-0019 Phone: 1-800-932-0665 or 717-705-5969, 110 North 8th St. Suite 203 Philadelphia, PA 19107 Phone: 215-560-1858 or 1-877-817-9497, 301 5th Ave. Over a 4week period, the employee worked 40, 50, 44, and 46 hours. For an employer to take a tip credit for an employees base hourly wage, the employee must earn at least $135 in tips per month and the employer must ensure that the base hourly wage and tips add up to be at least $7.25 per hour. Beginning January 1, 2022, these employees must earn at least: $50 per hour (for all hours worked); or A monthly salary of $8,679.16; and An annual salary of $104,149.81. Pennsylvania's state minimum wage rate is $7.25 per hour. These positions normally receive the same increase provided comparable civil service employees. It should be further noted that some state and local 2023 increases have already taken effect as some jurisdictions implement the change throughout the year (in July 2022 for example). A full time minimum wage worker in Pennsylvania working 40 hours a week, 52 weeks a year, will earn $58.00 per day, $290.00 per week, and $15,080.00 per year1. If applicable, please note that prior results do not guarantee a similar outcome. Effective January 1, 2022, the state minimum wage will be increased to $12.56/hour. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Civil service employees paid on an hourly or a salary basis in order to for. Specialty Credential law establishes a minimum salary of $ 7.25 per hour 2021, and looming fall elections incentivize! 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