The Pennsylvania Department of Labor and Industry (DLI) published its final rule to substantially increase the salary threshold for qualifying as an exempt Executive, Administrative and Professional (EAP) employee under the Pennsylvania Minimum Wage Act (PMWA). Regular rate] for salaried employees whose overtime pay is determined by the fluctuating workweek method will take effect August 5, 2022. An employee is entitled to at least minimum wage and overtime pay at time and a half for all hours worked over 40 hours per week. $684 per week ($35,568 annually) effective October 3, 2020; $780 per week ($40,560 annually) effective October 3, 2021; and. Can an employee be required to work overtime? If all employees are paid at least the state minimum wage or higher, tip pools may include both tipped and non-tipped employees. Act 102 Prohibition of Excessive Overtime in Health Care Act. The minimum wage in Pennsylvania is set on par with the federal minimum wage, so if the federal minimum wage increases, so will Pennsylvania's minimum wage. The change in the minimum wage also means an increase in the minimum salary an employee must earn in 2022 to be overtime exempt. Managers, supervisors, or employers can only receive tips from patrons if they provide the entire service on their own, without assistance. Effective January 1, 2022, the state minimum wage will be increased to $12.56/hour. All tips and gratuities paid by cash, credit card, or other non-cash method of payment are the property of the employee receiving them. Employers should watch these new laws carefully. ($1,000 weekly salary + $500 commissions)/40 = $37.50. Due to an increase in the state's minimum wage, the minimum salary required for the administrative, professional and executive exemptions from overtime under state law increased to $796.17 per week on January 1, 2023. The Department of Labor has been holding stakeholder meetings on the topic, she said, and added that the changes could also include an update to the duties test that is also part of the employee exemption analysis. 541.204). In addition, the Minimum Wage Act provides penalties for noncompliance. Learn how SHRM Certification can accelerate your career growth by earning a SHRM-CP or SHRM-SCP. For these employees, CalHR approves the salary range for each position and determines any annual increase. Help us keep Minimum-Wage.org up-to-date! While the first increase merely aligns the PMWAs salary threshold with its federal Fair Labor Standards Act (FLSA) counterpart, the PMWAs salary threshold will soon significantly eclipse the FLSA standard. The yearly earnings estimate of $15,080.00 is based on 52 standard 40-hour work weeks. Approximately 8% of Pennsylvania's hourly workers are paid at or below the minimum wage. Were ready for your tomorrow because were built for it. We do not often have good news to report for Pennsylvania employers in this blog. Janets employer can take a tip credit for the remaining 33 hours of her 40-hour workweek, because she performs only tip-producing work and 20 percent of directly supporting work during those hours. McCutchen spoke at the Society for Human Resources Management (SHRM) Employment Law and Compliance Conference in Washington, D.C., on March 29, 2022. You may be trying to access this site from a secured browser on the server. The PMWA and FLSA both place minimum wage and overtime pay obligations on Pennsylvania employers. A nail technician's tip-producing work includes performing manicures and pedicures and assisting the patron to select the type of service. Question:When can Miguels employer take a partial credit for the tips that Miguel receives against the payment of the full minimum wage and when must the employer pay a direct cash wage at least equal to the full minimum wage? Please log in as a SHRM member before saving bookmarks. Colorado: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. Scranton, PA 18503-1923 Under the states exemption for highly technical computer employees, the employee may be paid by salary (at least $961.54 per week in 2023) or by the hour ($31.41 per hour in 2023). overtime requirements. Beginning January 1, 2022, these employees must earn at least: $50 per hour (for all hours worked); or A monthly salary of $8,679.16; and An annual salary of $104,149.81. Other rights and protections are offered as well. the definitions of primary duty, customarily and regularly, directly and closely related or any of the other provisions of 29 C.F.R. The employee did not work overtime this week, Weekly Pay: $1,000 weekly salary + $0.00 overtime pay = $1,000, Overtime Pay: $25Regular Rate x 10 Hours of Overtime x 1.5 (time and one-half) = $375Overtime Pay, Weekly Pay: $1,000 weekly salary + $375overtime pay = $1,375weekly pay, Overtime Pay: $25 regular rate x 4 hours of overtime x 1.5 (time and one-half) = $150 Overtime Pay, Weekly Pay: $1,000 weekly salary + $150 overtime pay = $1,150 weekly pay. The Pennsylvania minimum wage was last changed in 2008, when it was raised $0.10 from $7.15 to $7.25. Minimum Wage and Overtime Complaint Form. Pennsylvania employers may not pay you under $7.25 per hour unless you or your occupation are specifically exempt from the minimum wage under state or federal law. $875 per week ($45,500 annually) effective Oct. 3, 2022. Answer:Once Janet performs non-tipped directly supporting work for more than 20% of her work week (20% of 40 hours = 8 hours), she is no longer engaged in her tipped occupation. In June 2021, Governor Wolf agreed to repeal the final rule relating to the threshold increases in exchange for additional funding for public schools. The employer can take a tip credit for 32.5 hours of Issas 35-hour workweek, because she performs the tip-producing work of assisting guests with luggage and because her amount of directly supporting work does not exceed 20 percent of her weekly hours (20% of 32.5 hours = 6.5 hours) in which Issa is engaged in a tipped occupation. Basic Minimum Rate (per hour): $15.50 Any work in excess of eight hours in one workday, in excess of 40 hours in one workweek, or in the first eight hours worked on the seventh day of work in any one workweek shall be at the rate of one and one-half times the regular rate of pay. Beginning January 1, 2023, these employees must earn at least: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. That, however, is possible bad news for employers best left for another day. No credit card or other non-cash transaction fees can be deducted from the tips of any worker. When can an employer take the tip credit deduction from employees base wages? Proactive compliance resources to help healthcare employers identify and address the unique hazards and reduce costs associated with workplace injuries and illnesses. When there are differences between state and federal law or regulations, an employer should follow the law or regulation which provides the most protection to workers. 2 Poverty line for a family of two in the lower 48 published 2016 by the U.S. Department of Health & Human Services. The federal Fair Labor Standards Act (FLSA) requires that employers pay most employees at least the federal minimum wage for each hour worked as well as overtime pay for all hours worked in excess of 40 in a workweek. The minimum annual salary for exempt employees, currently at $35,568, would increase to more than $56,000 if the DOL adjusts the rate from its 2016 proposed rule for inflation. Cleaning non-residential parts of a hotel, such as the exercise room, restaurant, and meeting rooms, is not part of the tipped occupation of a hotel housekeeper. Minimum Wage Pennsylvania's current minimum wage is $7.25. For example, the rule does not: Pennsylvania employers have one year to prepare for a new state salary threshold that significantly exceeds the FLSA standard. 541.303). Overtime Pay: $0.00. Beginning January 1, 2023, these employees must earn at least: $53.80 per hour (for all hours worked); or A monthly salary of $9,338.78; and An annual salary of $112,065.20 Colorado: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. The employee is owed $1,375 for that week of pay including their $1,000 weekly salary plus $375 in overtime pay for the ten hours of overtime they worked. The final regulation provides that an employer may satisfy up to 10% of the salary amount by the payment of nondiscretionary bonuses, incentives and commissions that are paid annually or more frequently.1At the end of the year (which period may be any 52-week period as defined by the employer), if the sum of the employees salary and any nondiscretionary bonuses, incentives and commissions do not equal at least 52 times the weekly minimum salary amount, the employer may make one final payment sufficient to achieve the required level, so long as the payment is made no later than the next pay period after the end of the year. Failure to display a Pennsylvania labor law poster in the workplace can result in severe fines. In this case, the supervisor may keep the entire tip. In just over six months, Pennsylvanias minimum salary requirements for exempt (salaried) employees are set to increase above the federal minimum standard. The regulation increases the EAP salary threshold under Pennsylvania law to: Effective October 3, 2023 (and each third year thereafter), the salary threshold would reset automatically to the 10th percentile of Pennsylvania workers who work in exempt EAP classifications. In addition, the Minimum Wage Act provides penalties for noncompliance. To be classified as exempt from New York's overtime requirements, executive and administrative employees must meet minimum salary requirements and satisfy certain duties tests. In Washington, employees must satisfy certain salary and duties tests to be classified as exempt from overtime under state law. Any employee under eighteen working less than 650 hours per year for their employer is exempt from the minimum wage. So they return home each day to the families who love them. For example, if an Executive, Administrative, or Professional employee works 55 hours per week, their salary must be at least $660 (minimum wage $12 x 55 hours) or their employer will not be complying with the NJ minimum wage requirements. An employer can take a tip credit for the time a tipped employee spends performing directly supporting tip-producing work provided that the employee does not perform that work for more than 20% of their work week. The rule increased the threshold for an exempt employee to $684 per week The complexities associated with the employment laws, and the costs of non-compliance, continue to increase for employers seemingly with each passing year. While the new regulations do not create additional records to be kept, employers may benefit from maintaining specific records about when tipped employees may be performing additional non-tipped duties during a pay period. total wages during a workweek, along with overtime incurred. Issa performs these tasks for no more than five hours per week. 1130 12th Ave., Suite 200 Altoona, PA 16601-3486 Phone: 1-877-792-8198 or 814-940-6224, 1301 L&I Building 651 Boas St. Harrisburg, PA 17120-0019 Phone: 1-800-932-0665 or 717-705-5969, 110 North 8th St. Suite 203 Philadelphia, PA 19107 Phone: 215-560-1858 or 1-877-817-9497, 301 5th Ave. 100 Lackawanna Ave. Keystone State. Today is one of those rare days when we bring good news. As a result, the minimum salary required for the executive and administrative exemptions in these upstate areas increased to $1,065 per week on December 31, 2022. Pennsylvania's state minimum wage rate is $7.25 per hour. We previously wrote about these regulationsand the impact they would have on Pennsylvania employers. Please log in as a SHRM member. Tip-producing work: Issas tip-producing work includes assisting guests with their luggage. 541.500). What if the tipped worker is paid at least $7.25 per hour, then can an employer deduct credit card or other non-cash transaction fees from their tips? A hotel bellhop's tip-producing work includes assisting customers with their luggage. In Minnesota At the end of the year (which period may be any 52-week period as defined by the employer), if the sum of the employee's salary and any nondiscretionary bonuses, incentives and commissions do not equal at least 52 times the weekly minimum salary amount, the employer may make one final payment sufficient to achieve the required level, so long as the payment is made no later than the next pay period after the end of the year. While the first increase merely aligns the PMWA's salary threshold with its federal Fair Labor Standards Act (FLSA) counterpart, the PMWA's salary threshold will soon significantly eclipse the FLSA standard. Copyright year J. J. Keller & Associates, Inc. All rights reserved. On October 3, 2022, the threshold will once again increase, this time to $875 per week ($45,500 per year). Effective July 1, 2022, the minimum wage across the state is $9.50/hr. For example, an employee who has piece rate earnings of $500 in a workweek for 40 hours work has a regular rate of $12.50 per hour. What does this mean? To qualify for one of the three white collar exemptions under the PMWA, an employee will now need to earn a minimum weekly salary of: $684 (or $35,568 per year) (consistent with federal law);. No, managers and supervisors cannot take any portion of the tip pool. Other minimum wage and overtime exemptions. No. Servicing vehicles is not part of the tipped occupation of a parking attendant. This is a 28% increase above the current $684 per week level and a 92% increase above the 2019 minimum salary threshold. Oregon law requires a weekly salary equivalent to a monthly salary calculated by multiplying the applicable regional minimum wage by 2,080 hours and dividing that amount by 12 months. 175) toabrogate sections 231.82, 231.83, and 231.84 from the regulations for the PA Minimum Wage Act. If you have questions about the Pennsylvania minimum wage, please ask us and someone will respond to you as soon as possible. You can trust our expertise across subjects relating to labor, transportation, environmental, and worker safety. This article was written by Terri Dougherty of J. J. Keller & Associates, Inc. Get the information and products you need to stay on top of industry changes and comply with regs. If all employees are paid at least the state minimum wage of $7.25 or higher, tip pools may include both tipped and non-tipped employees. Minimum Wage for Employers with 25 Employees or Less. 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