Overtime Pay For Employees In Pennsylvania
Federal Overtime Rule (Effective January 1, 2020)
An employee is entitled to at least minimum wage and overtime pay at time and a half for all hours worked over 40 hours per week. The federal Fair Labor Standards Act (“FLSA”), however, does not require overtime pay for “any employee engaged in a bona-fide executive, administrative, or professional capacity” who is paid on a salaried basis instead of an hourly wage and meets the minimum salary threshold defined in federal regulations. (29 U.S.C. § 213a(1).
The United States Department of Labor published revised final regulations concerning its overtime requirements under the FLSA on September 24, 2019. (29 CFR 541).
The revised federal regulations included:
- raising the “standard salary level” from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker); and
- allowing employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level.
What Is Overtime?
Unless employed in an occupation specifically exempted by the Pennsylvania Minimum Wage Act or FLSA, employees must receive pay for hours worked in excess of 40 in a workweek, at a rate not less than one and one-half times their regular rate of pay. This rate is referred to as “overtime” pay.
Who Qualifies For Overtime Pay?
With few exceptions, hourly employees who work more than 40 hours a week must be paid time and a half for all hours over 40.
Most salaried employees who work more than 40 hours per week and earn less than the federal salary threshold are eligible for overtime regardless of their job duties.
Most salaried employees who do NOT perform executive, administrative, or professional duties are eligible for overtime regardless of how much they are paid.
Salaried employees who perform executive, administrative, or professional duties and make more than the salary threshold per year are NOT eligible for overtime.
What Is The “Regular Rate” Of Pay?
Generally, an employee’s regular rate is the amount that the employee is regularly paid for each hour of work. The regular rate of pay cannot be less than the Pennsylvania minimum wage of $7.25 per hour.
When an employee is paid on a non-hourly basis (e.g., piece work, salary), the regular hourly wage rate is determined by dividing the total hours worked during the week into the employee’s total earnings. For example, an employee who has piece rate earnings of $500 in a workweek for 40 hours work has a regular rate of $12.50 per hour. $500.00 total wages ÷ 40 Hours = $12.50 Per Hour Regular Rate.
Can Bonuses Be Used To Satisfy Part Of The New Standard Salary Level Test?
Yes. Federal regulations allow up to 10 percent of the salary threshold that can be satisfied by non-discretionary bonuses, incentives, and commissions paid on an annual basis.
Can An Employee Be Required To Work Overtime?
Yes. Employers can dictate the time of day and hours an employee works.
Can An Employee Be Required To Waive Their Right To Receive Overtime?
No. An announcement by an employer that overtime work will not be permitted, or that only overtime work authorized in advance will be paid, does not cancel the employer’s obligation to pay overtime to workers for hours worked beyond 40 hours per week.
Can An Employer Refuse To Pay An Employee For Overtime For Hours That Have They Have Worked?
No. An employer cannot refuse to pay an employee for overtime, unless the employee qualifies for an exception from overtime under Pennsylvania’s Minimum Wage Act or the FLSA.
Source: PA Department of Labor & Industry/Overtime Rules In Pennsylvania