woman working overtime in factory

Compliance with the federal Fair Labor Standards Act (FLSA) is critical, but it sometimes causes employers to forget their obligations under state laws concerning overtime and other wage rules. Often, state regulations are stricter and more favorable to employees compared to their federal counterparts. The recent changes to how overtime pay is calculated in Pennsylvania are an excellent example of this. The Lore Law Firm takes a look and explains what workers need to know about their wage and pay rights.

Pennsylvania Overtime Is Based on a 40-Hour Week, Not Total Number of Hours

While the FLSA provides the bare minimum wage, hour, and labor laws for all workers, individual states are free to set their own rules (as long as they provide more generous protections to workers). Pennsylvania’s rules are friendlier to workers in several ways and therefore impose higher compliance requirements upon employers in that state. Perhaps the most prominent example of this is the requirement that an employee’s overtime rate must be based on a 40-hour week, not the total number of hours worked in a week.

The Pennsylvania Minimum Wage Act (PMWA) governs not only minimum wage but overtime pay for workers. In the summer of 2022, the Pennsylvania Department of Labor and Industry amended the PMWA to alter the way overtime pay must be calculated for salaried, non-exempt workers. Note that just because a worker is paid a salary does not mean he or she isn’t entitled to overtime pay.

Overtime, in general, must be calculated at 1.5 times an employee’s regular rate of pay. The updates to the PMWA changed how exactly the “regular rate” is calculated for salaried, non-exempt workers. These amendments will, in some cases, result in higher pay for these workers.

Under the revised PMWA regulations, a salaried, non-exempt employee’s regular pay rate is to be calculated by dividing all compensation that must be included in the employee’s regular rate by 40 hours. This contrasts with the FLSA’s fluctuating workweek method which divides that compensation by the total number of hours (straight-time plus overtime) that the employee worked that week. The regular rate that results under the PMWA formula is then multiplied by 1.5, and then multiplied by the number of overtime hours the employee works to determine the amount of overtime pay owed to that employee.

An example of how PMWA differs from FLSA

Take the following example. A non-exempt worker makes a salary of $1,000 per week. Although the hours worked changes from week to week, the salary is constant. In one week, the employee works 50 hours. Under the updated PMWA rules, the employee is entitled to $375 in overtime; under the FLSA, the employee would only be entitled to $100 in overtime. Here is a breakdown of the calculation:

Weekly pay ÷ 40 hours = Regular RateRegular Rate × 1.5 × Number of OT hours = Total Overtime OwedWeekly pay ÷ 50 hours = Regular RateRegular Rate × 0.5 × Number of OT hours = Total Overtime Owed
($1,000 ÷ 40 hours) × 1.5 × 10 OT Hours = Total Overtime Owed($1,000 ÷ 50 hours) × 0.5 × 10 OT Hours = Total Overtime Owed
$375 in Overtime Owed$100 in Overtime Owed

Remember, the Pennsylvania employer must pay the $375 rate instead of $100 since the Pennsylvania law is more beneficial for workers.

Our Firm Can Help You Win the Overtime Pay You Deserve

Whether you are not being paid the overtime amount that is due to you under state or federal laws, The Lore Law Firm can win the compensation you have worked for. Our nationwide legal network is ready to get to work fighting for the wages the law entitles you to receive. Complete our free and confidential client intake form today for a review of your case.

Michael Lore is the founder of The Lore Law Firm. For over 25 years, his law practice and experience extend from representing individuals in all aspects of labor & employment law, with a concentration in class and collective actions seeking to recover unpaid back overtime wages, to matters involving executive severance negotiations, non-compete provisions and serious personal injury (work and non-work related). He has handled matters both in the state and federal courts nationwide as well as via related administrative agencies. If you have any questions about this article, you can contact Michael by using our chat functionality.