Employees in Pennsylvania are protected by both state and federal overtime pay and labor laws. In several important respects, Pennsylvania overtime laws provides greater rights and protections than federal law does.
One very significant way in which Pennsylvania overtime pay laws are more favorable to workers is that non-exempt workers (eg paid hourly, piece-rate or day-rate) must be paid for every minute spent performing “work”. See Pennsylvania Overtime Regulations section below for more details.
The following information is provided as an overview for workers in PA on a number of common areas of concern, including Pennsylvania overtime pay and the application of certain exemptions from the PA overtime pay laws. While individual wage disputes are routinely handled by the PA Department of Labor & Industry, private law firms such as The Lore Law Firm, pursue most claims that involve a failure to pay PA overtime pay. These cases concerning Pennsylvania overtime laws are handled on a contingent fee basis and are usually filed on behalf of the entire class of workers who were denied Pennsylvania overtime pay.
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Pennsylvania’s minimum wage rate is currently $7.25 per hour which is the same as the federal rate
For tipped employees, the minimum wage rate is $2.83 per hour which is higher than the federal rate of $2.13 per hour. The employer must make up the difference if tips and the hourly rate do not meet the Pennsylvania minimum wage rate.
As discussed below, Philadelphia’s law regarding deduction of credit card fees from employee’s tips requires employers to pay employees the full amount of the gratuity that the patron indicated on the credit card slip.
Changes to the Minimum Wage:
Philadelphia Mayor Nutter signed an executive order on May 6, 2014 increasing the minimum wage for city contractors from $10.88 to $12 per hour effective January 1, 2015. This order extended the Philadelphia minimum wage regulations to first-tier subcontractors as well.
On 3/7/2016, Governor Tom Wolf signed an executive order increasing the minimum wage for state workers to $10.15 per hour. While this does not apply to employees who work for private employers, he did call on state legislators to pass a minimum wage increase for all workers in Pennsylvania.
The mayor of Pittsburgh, Bill Peduto, issued an executive order on 11/10/2015 raising the minimum wage for Pittsburgh city employees to $15.00 per hour by the year of 2021. The order raises the minimum wage for city workers to $12.50 in 2017, $13.75 in 2019, and $15.00 in 2021.
Pennsylvania Overtime Regulations
Under Pennsylvania labor laws and overtime rules in PA, overtime pay of at least 1 ½ times the employee’s regular wage rate must be paid for all hours worked over 40 in a workweek. Note that this applies to salaried non-exempt employees as well because the fluctuating workweek method of overtime pay calculation is not permitted under state law.
The Pennsylvania Department of Labor proposed updates to the overtime pay regulations in June 2018 to increase the minimum salary level required to qualify an employee as “exempt” from Pennsylvania’s labor laws on overtime pay. These changes went into effect as of October 3, 2020. However, in June 2020, Governor Wolf agreed to repeal this final rule in exchange for additional funding for public schools. This new bill became law on July 9, 2021; therefore, the 2020 rule increasing the salary limits will be repealed as of September 7, 2021 – see Specific Overtime Exemptions below.
The Pennsylvania Minimum Wage Act (PMWA) is the PA state equivalent of the federal Fair Labor Standards Act (FLSA). The PMWA and FLSA both govern overtime pay obligations for Pennsylvania employers. While the laws’ requirements are similar, they are not identical. Employers in Pennsylvania must adhere to both laws, and where one law is more favorable to employees than the other, employers must follow the one that is more pro-employee.
One very significant way in which Pennsylvania overtime pay laws are more favorable to workers is that non-exempt workers (eg paid hourly, piece-rate or day-rate) must be paid for every minute spent performing “work”. This was confirmed in a recent Pennsylvania Supreme Court case against Amazon in which the court ruled that mandatory security screenings do count as hours worked in Pennsylvania. It said that state wage law “plainly and unambiguously requires payment for all ‘hours worked’ ” and because workers are under Amazon’s control during security checks, those few (4-8) minutes each day do count as ‘hours worked.’”
Pennsylvania wage law is much broader than federal law in defining what counts as “Hours Worked”. It states that workers must be paid for “time during which an employee is required by the employer to be on the premises of the employer, to be on duty or to be at the prescribed work place.”
Hours Worked includes:
- All time during which you are required to be at a designated work location
- All time during which you are required to be on duty or to be at a designated work site
- All time spent traveling as part of your job during normal working hours
- All time during which you are permitted to do work
Unpaid Work can Include:
- waiting to undergo, and undergoing security screenings or bag checks
- waiting to undergo, and undergoing Covid-19 screenings such as tests and temperature checks
- boot up, sign in and download time spent prior to being “clocked in”
- “clocking out” before spending time shutting down programs and logging out
- Waiting on assignment or when to begin, while at work premises
- Receiving or sharing work-related information – pre/post shift “relief time”
- driving to/from home in a company vehicle if you do some work/start working before leaving home, talk/text for work while driving or continue to perform work tasks after arriving home.
- walking, riding and traveling to and from the actual place of work (required to park in remote lot and take a bus)
- changing in/out of required work clothes
- sending/receiving work related emails and texts or using employer smartphone apps while “off the clock”
- checking voicemail or emails at the start of the day; time developing a plan, schedule, or route for the day; time reading or completing required paperwork; or time loading or stocking equipment.
Specific Overtime Exemptions in Pennsylvania
Executive, Administrative, & Professional Employees
Update: Governor Wolf agreed to repeal the final rule mentioned below that increased the minimum salary required for the Executive, Administrative, and Professional overtime exemptions. This provision will go effect on September 7, 2021 and repeals all of the PA regulations for these exemptions.
The likely effect of this repeal is that PA courts will look to the federal law in effect at the time the PA overtime law was first enacted in 1968 to interpret the duty requirements of these exemptions and the minimum salary required will be set at the federal level of $684 per week ($35,568 annually) as of January 1, 2020.
A new Pennsylvania state overtime law went into effect as of October 3, 2020, [Note: this law has been repealed – see above] which increases the minimum salary threshold for the Executive, Adminstrative, and Professional exemptions. Under the new rule, the minimum salary required for employees to be exempt under these exemptions will increase as follows:
$684 per week ($35,568 annually) as of October 3, 2020;
$780 per week ($40,560 annually) as of October 3, 2021;
$875 per week ($45,500 annually) as of October 3, 2022.
The salary threshold will reset automatically starting October 3, 2023 and every 3rd year thereafter to the 10th percentile of PA workers wor work in exempt Executive, Administrative, and Professional classifications. As under the FLSA regulations, employers may uses non-discretionary bonuses, incentives, or commissions to satisfy up to 10% of the salary amount.
Under Pennsylvania labor laws, computer employees are not considered exempt as under federal law and, therefore, may be entitled to overtime, unless covered by another exemption.
Highly Compensated Employees
Pennsylvania labor laws also do not provide an overtime exemption for employees earning more than $100,000 ($107,432 as of 2020) per year as does the federal law.
Outside Sales Employees
Outside sales employees in Pennsylvania must spend more than 80% of their work time away from the employer’s place of business making sales, a more demanding requirement than FLSA’s “primary duty” test. If an employee does not meet these requirements, but is designated as an “outside sales” employee, he may be due unpaid overtime per Pennsylvania overtime laws.
No Chinese Overtime
Pennsylvania labor law also differs from federal law in that it does not allow the use of the fluctuating workweek method (aka “Chinese Overtime“) of paying overtime to salaried workers whose workweek fluctuates above and below 40 hours per week.
This was confirmed by a recent Supreme Court opinion holding that, under the Pennsylvania Minimum Wage Act, the “half-time” or fluctuating workweek method of calculating overtime pay for salaried workers in PA is not legal. This can make a significant difference in the amount of overtime pay a salaried non-exempt employee is owed.
For example, according to overtime rules in PA, in a workweek in which 50 hours are worked for a salary of $800, the regular rate of pay would be $16 per hour – using the half-time method each overtime hour would be paid at $8 instead of $24.
Holiday & Vacation Laws
Pennsylvania labor laws do not require that an employee be given paid holidays off or additional pay for working on a holiday.
Pennsylvania state labor laws do not require that employers provide benefits like sick leave, vacation pay or severance pay. If provided, the employer must follow its own policies for these types of payments.
Changes to the Sick Leave Law
Effective May 13, 2015, employees who work at least 40 hours a year within the Philadelphia city limits will be eligible to earn paid and unpaid sick leave. If an employer has 10 or more employees, they must provide paid sick leave. Employers with less than 10 employees, must provide unpaid sick leave. For further details regarding Philadelphia sick leave, please see the Philadelphia Sick Leave Poster.
Meal Break & Rest Period Laws
Meal and rest breaks are not required for employees 18 and over. Minors between 14 and 17 years old must receive a meal break of at least 30 minutes if they work 5 or more consecutive hours.
If an employer does give a break and the break is less than 20 minutes, employees must be paid for this time. If employees are given a meal break lasting more than 20 minutes and are relieved of all work during this period, the employee does not have to pay for this time.
Pay Periods in Pennsylvania
Employers must pay employees on regularly scheduled paydays designated by the employer. Employees must be informed at hiring of the time and place of payment and the pay rate and fringe benefits to be paid. The time between the end of the pay period and the payday must not exceed:
- Time specified in a written contract between the employer and employee
- The standard customary in the trade, or
- 15 days.
Employers may make deductions from wages that are required by law. In addition, employees may give written permission for deductions to be made that benefit the employee; e.g., to pay back a loan from a third party. Blanket authorizations signed at hiring will not be valid. Deductions generally, cannot reduce gross pay below minimum wage.
Employers in Philadelphia must comply with regulations regarding tips left by patrons for employees, including a requirement that all gratuities be paid to employees without deduction, including, in the case of a gratuity paid by credit card, any deduction for credit card processing fees. Employees can receive up to $2,000 per violation plus the amounts that were improperly deducted.
Specifically, the Philadelphia law regarding deduction of credit card fees from employee’s tips states:
An employer that permits patrons to pay gratuities by credit card shall pay employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deduction for any credit card payment processing fees or costs that may be charged to the employer by the credit card company. Payment of gratuities made by patrons using credit cards shall be made to the employees not later than the next regular payday following the date the patron authorized the credit card payment.
Pennsylvania labor laws require that employees be provided with a pay stub for each pay period. The stub must show the beginning and ending dates of the pay period, the number of hours worked, the pay rate, the amount earned, itemized deductions, and net pay.
Do you feel as though you have been paid incorrectly or are owed overtime pay? Fill out a case evaluation form and our experienced overtime lawyers will contact you with more information regarding your case.