Multiple Clocks Depicting OvertimePennsylvania has raised the threshold for determining whether employees are eligible for overtime pay – and the threshold is scheduled to continue to rise multiple times, automatically, in the years to come.  On October 3, 2020, the Pennsylvania Department of Labor & Industry (L&I) issued a final rule concerning overtime pay requirements under the Pennsylvania Minimum Wage Act (PMWA) for workers in the Commonwealth. You can find the final rule here.  According to L&I Secretary Jerry Oleksiak, the final rule marks the first change to the Commonwealth’s overtime structure “in more than four decades.”  More employees will now be eligible for overtime pay due to this rule.

What is the final rule?

The U.S. Department of Labor (DOL) modified its overtime pay requirements under the Fair Labor Standards Act (FLSA), effective January 1, 2020.  However, Pennsylvania is going beyond the recent federal changes, and determined the below overtime thresholds for overtime eligibility to increase in three steps:

Unless an exemption applies, any Pennsylvania employee whose base earnings fall below the thresholds is entitled to overtime pay.  In addition, starting October 3, 2023, the salary threshold will automatically increase every three years.

When are these new changes effective?

The law and initial change became effective October 3, 2020.

What does this mean for employers?

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