The Trump administration hasn't acted yet on a stalled 2016 federal proposal to update U.S. overtime pay rules for the first time in 14 years. So, Gov. Wolf is pushing a proposal he says could boost overtime pay (or cut hours) for nearly half a million Pennsylvania workers by 2022.
The state Labor Department's proposed rule would boost the minimum pay that low-level bosses and specialized workers would have to earn to be exempt from overtime, each year for the next three years, ending in 2022 at $921 a week — about $48,000 a year.
That's a little more than double the current national limit of $455 a week (almost $24,000) which employers can pay management, administrative, and professional help without having to pay overtime for extra hours. The limit would be updated every three years after 2022, to reflect changing regional wage levels.
"If they are not paid this minimum salary level, they either need to be paid overtime [for working over 40 hours a week], or their salary needs to be increased," says labor lawyer Andrea Kirshenbaum, who represents bosses as chair of the Wage and Hour Practice Group at law firm Post & Schell. That would apply "even if someone performs administrative or professional job functions that are exempt from overtime." The rule also updates and simplifies definitions of who's a manager and what is administrative and professional work.
That might not seem like a lot to pay a boss — if you're in a metro labor market where labor demand is relatively tight. But employers in poor rural counties, and nonprofit agencies around the state, tend to pay less, and can be counted on to urge state officials not to increase the overtime triggers, Kirshenbaum told me.
"$921 a week means something very different once you get away from Philadelphia and Pittsburgh," Kirshenbaum said. "Thousands" of employers protested the federal proposal two years ago; she expects that many Pennsylvania bosses will also object.
Wolf's proposal would set the overtime line a little higher than what the Obama administration had tried to impose without the support of Congress on Dec. 1, 2016 — until a federal judge in Texas, two weeks after Trump's election, stalled the proposal, leaving it up to the new Republican president (and Congress) to review and refine the policy. Which hasn't happened yet.
Wolf has followed Democrats in New York, California, and other "blue" states that have set higher overtime triggers — plus New Jersey, with its Pay Equity Act, and Philadelphia with several liberal employment laws that have upset Comcast and other big employers — in pushing labor policies that go beyond minimum U.S. government requirements, Kirshenbaum told me. (She expects Trump's Labor Department will eventually update the federal overtime rule in the near future; as with minimum wages, states are free to set higher limits.)
The Obama proposal was cited by some employers, including Malvern-based Vanguard Group, one of the Philadelphia area's largest employers, as a reason to reclassify workers in ways employees feared would make them less likely to collect overtime or bonuses. Some employers may feel under less pressure two years later, since unemployment has fallen below 4 percent and stands near historic lows. But Kirshenbaum still expects Harrisburg will be deluged with notes from employers who don't think they should be obliged to boost employees' standard of living or cut their hours without cutting their pay.