Governor Wolf to Modernize Outdated Overtime Rules to Strengthen the Middle Class and Provide Fairness for Workers
January 17, 2018
Philadelphia, PA – Today, as part of his “Jobs That Pay” initiative, Governor Tom Wolf announced a proposal to strengthen the middle class by modernizing Pennsylvania’s outdated overtime rules to increase the pay of nearly half-a-million people to ensure they are compensated fairly for their hard work.
“Pennsylvania’s overtime rules haven’t changed in more than 40 years and workers are paying the price,” said Governor Wolf. “I am taking this action to ensure hundreds of thousands of Pennsylvanians who work more than 40 hours a week for the same job receive the overtime pay they have earned.
“It’s simple, if you work overtime, then you should get paid fairly for it. This important step will put more money into the pockets of hardworking people and will help expand the middle class in Pennsylvania.”
Governor Wolf made the announcement at The Fresh Grocer of Grays Ferry in Philadelphia, where he was joined by legislators, local elected officials, store management, staff, and local workers, who were quick to praise the governor’s announcement.
“What the governor is proposing is common sense,” said Denise Kennedy, an Upper Darby resident and secretary at Garrettford Elementary School. “Paying workers fairly on the lower end of the pay scale will put more money in our pockets so we can spend it at local businesses. All I can say is, what can I do to help get this done?”
The middle class is built on the idea of hard work and fair pay, but workers in Pennsylvania have not received a minimum wage increase in nearly a decade and overtime rules established in 1977 have not kept up with inflation.
Many hardworking Pennsylvanians are not getting the overtime pay they deserve. Because the overtime rules have not been updated, employees are covered by an exemption to overtime that was intended for high-wage, white-collar employees more than 40 years ago. As a result, a salaried worker earning up to $24,000 a year, which is below the poverty line for a family of four, can work more than 40, 50, 60 or more hours a week and is not guaranteed overtime at time-and-a-half.
“Four decades is far too long for Pennsylvania’s overtime regulations to remain stagnant,” said Acting Labor & Industry Secretary Jerry Oleksiak. “Updating the overtime rules to keep pace with our 21st century economy is the right thing to do for the hardworking men and women of the commonwealth. It will also generate competitive salaries and reduce turnover, helping to create and keep ‘Jobs that Pay’ here in Pennsylvania.”
At the direction of Governor Wolf, the Department of Labor & Industry is finalizing a plan to modernize rules and clarify requirements. The new rules will phase in over four years to increase the salary threshold that requires employers to pay overtime to most salaried workers.
The first step will raise the salary level to determine overtime eligibility for most workers from the federal minimum of $455 per week, $23,660 annually, to $610 per week, $31,720 annually, on Jan. 1, 2020. The threshold will increase to $39,832 on Jan. 1, 2021, followed by $47,892 in 2022, extending overtime eligibility to 370,000 workers and up to 460,000 in four years.
Starting in 2022, the salary threshold will update automatically every three years so workers are not left behind. Additionally, the duties for executive, administration and professional workers will be clarified to make it easier for employers to know if a worker qualifies for overtime.
“This long overdue moment for thousands of struggling, hard-working employees in the 8th senatorial district and across Pennsylvania is saying this really is a happy new year,” Sen. Anthony Williams said.
When fully implemented, modernizing overtime rules will increase the wages of an estimated 460,000 workers in Pennsylvania. That will lead to a stronger middle class. When workers earn more, they spend it in their local communities, which helps grow the economy throughout the state.
“The Governor’s proposal will give many working families in PA an increase in their income and will make sure they are paid for the hard work they are doing,” Rep. Jordan Harris said. “That additional revenue will help pay utility bills, buy groceries, take vacations, and just make life a little easier.”
The Department of Labor & Industry anticipates releasing the proposed to update the regulations for public comments in March.