Philadelphia, Pa. (February 14, 2023) - 2022 was an unexpectedly busy year in the employment law arena for Pennsylvania. Below, we recap the key new developments that employers should be mindful of to ensure legal compliance in 2023.
Wage and Hour
On August 5, 2022, legislation signed by Governor Wolf took effect, impacting three key wage and hour practices for employers in Pennsylvania under the Pennsylvania Minimum Wage Act (PMWA): overtime calculation, employee tips, and service charges.
New Overtime Calculation for Salaried Nonexempt Employees
Pennsylvania law now diverges from federal law by changing the formula for calculating an employee's Regular Rate of Pay (RROP).
Pennsylvania employers must now calculate the RROP for salaried, nonexempt employees by adding all remuneration (subject to certain preexisting exceptions) paid to the employee during a workweek (e.g., weekly salary, nondiscretionary bonuses, and commissions) and dividing this amount by 40 hours. To calculate the overtime (OT) pay due, the regular rate is (a) multiplied by 1.5 and then (b) multiplied by the number of hours worked in excess of 40 in that workweek. Notably, the federal fluctuating workweek method cannot lawfully be used for Pennsylvania salaried nonexempt workers.
This new formula is, by design, more protective for employees and results in greater overtime pay than under the federal formula. Pennsylvania employers with salaried nonexempt employees should evaluate their practices, especially for employees with a fluctuating work week schedule, to ensure compliance.
Tipped Employees
Pennsylvania has aligned itself with federal law as...
