Under the Fair Labor Standards Act (FLSA), non-exempt employees are eligible for overtime, while exempt workers are not. While many states adhere to the guidelines established by the FLSA for calculating overtime pay for non-exempt, salaried workers, some states have gone above and beyond these standards to ensure additional worker protections.
Pennsylvania is one of them. In August 2022, state lawmakers introduced new provisions to the Minimum Wage Act affecting salaried, non-exempt employees across various industries that drastically change how overtime pay is calculated.
Exempt vs. Non-Exempt Employees and Overtime
Unless they are classified as exempt under the FLSA or Pennsylvania’s Minimum Wage Act, employees who work more than 40 hours in a workweek are entitled to overtime of time-and-a-half their regular pay rate. Many salaried employees are entitled to overtime pay unless they perform administrative, professional, or executive duties.
It is illegal for employers to ask their employees to waive their right to overtime. Moreover, an employer may not establish rules requiring employees to obtain authorization for overtime in advance to receive overtime pay.
Provided a salaried employee does not fall under one of the exemptions for overtime, they are considered non-exempt. Pennsylvania employers must adhere to the new overtime rate calculations introduced in August 2022 when paying non-exempt, salaried employees. Failure to do so could give the employee the right to file a wage theft claim for backpay, interest, attorneys’ fees, and other financial damages.
Updates to Overtime Rate Calculations for Salaried, Non-Exempt Employees
The updated rules that Pennsylvania introduced in August 2022 for non-exempt, salaried employees particularly impact individuals who work a fluctuating workweek. These rules now differ from the FLSA’s rules for calculating overtime for non-exempt, salaried employees.
Remember, overtime pay should equal 150% times the employee’s regular rate of pay. Before the updated changes went into effect, employers with salaried, non-exempt employees would divide the worker’s salary by the total hours they worked that week to determine the regular rate of pay.
Then, they would multiply the regular rate of pay by the number of overtime hours that the employee worked and multiply that number times 0.5 to achieve the final overtime rate. Because salaried employees may work different hours from week to week, this old method resulted in inconsistent overtime pay and sometimes deprived employees of the overtime pay they were entitled to receive.
Now, Pennsylvania uses a different method of calculation that ensures stable overtime wages for non-exempt, salaried workers. Instead of determining the employee’s regular rate of pay by dividing their salary by the total hours they worked that week, companies must divide their salary by 40 hours a week no matter how many hours the employee actually worked that week.
A Wage and Hour Attorney Can Help You Understand Your Legal Rights
The amendments introduced in 2022 may increase compensation for certain salaried, non-exempt workers who are entitled to overtime pay. Pennsylvania employers who do not comply with the updated rules deprive non-exempt workers of the full and fair wages they are due.
Employers who do not classify and pay salaried, non-exempt workers correctly are in breach of both state and federal law.
If you believe you are owed backpay by your employer for overtime, you should contact an attorney for more information about your legal rights. Start your free, confidential review today by using our online chat or submit a form.
