Pennsylvania's Plan to Raise Minimum Salaries for Overtime-Exempt Workers to $48,000 Scrutinized
Author: Michael Cardman, XpertHR Legal Editor
October 9, 2018
Pennsylvania's plan to raise the minimum salary for most overtime-exempt employees to nearly $48,000 has encountered a serious roadblock.
Earlier this year, the Pennsylvania Department of Labor & Industry (DLI) proposed regulations that will, if finalized in their current form, raise the minimum salary level and update the duties tests for executive employees, administrative employees and professional employees.
On October 6, the state's Independent Regulatory Review Commission (IRRC) - which has the authority to reject any regulations that it deems are not in the public interest - raised a number of concerns about the DLI's proposal, among them:
- The DLI's failure to achieve consensus on many issues, as reflected in "hundreds of comments" from HR professionals, businesses, nonprofit organizations and others highlighting "numerous and significant outstanding concerns";
- Suggestions from state lawmakers that the DLI should wait for the federal government to issue its overtime rule first before changing the Pennsylvania overtime rule, and that any changes should be addressed through legislation rather than regulation;
- Estimated costs of compliance that were provided by nonprofit and higher education employment sectors, which "appear to contradict" the DLI's estimates; and
- The general consensus among employers that the proposed salary levels are ''unprecedented,'' ''extreme,'' and ''unsustainable.''
The IRRC said, "[T]he issues raised deserve careful contemplation because the Department's responses will affect approximately 460,000 salaried Pennsylvanians (by 2022), 230,000 businesses (of which 225,400 are small businesses) and 108,491 nonprofit organizations."
The DLI must consider the IRRC's comments in preparing its final regulation, which must be submitted no later than August 22, 2020. If the IRRC approves the final rule, it would undergo a final review by the state attorney general and then take effect once it is published in the Pennsylvania Bulletin.
If the IRRC rejects the final rule, the DLI must either withdraw it or try to revise and resubmit it.