Pennsylvania Overtime and Labor LawsEmployees 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. 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.
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.
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.
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.
The Pennsylvania Department of Labor is scheduled to propose regulations in March 2018 that will increase the minimum salary level required to qualify an employee as “exempt” from Pennsylvania’s labor laws on overtime pay.
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.
Pennsylvania labor laws also do not provide an overtime exemption for employees earning more than $100,000 per year as does the federal law.
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.
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 appellate 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.
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.
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.
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.