On August 5, 2022, new Pennsylvania state wage-and-hour regulations for tipped and salaried nonexempt workers under the Pennsylvania Minimum Wage Act (PMWA) go into effect. This article focuses exclusively on the new rules for salaried nonexempt employees.
New Overtime Calculation for Salaried Nonexempt Employees
Under the new regulation, codified at 34 Pa. Code § 231.43(g), Pennsylvania employers must calculate the regular rate of pay 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. The new formula under the PMWA for calculating overtime premiums for salaried nonexempt employees is set forth below.
PMWA Salaried Nonexempt Formula:
[(Weekly salary + any other remuneration not excluded under 34 Pa. Code § 231.43(a)) 40 hours] 1.5 OT hours = Total Overtime Owed
The new PMWA salaried nonexempt overtime formula is a departure from the Fair Labor Standards Act’s (FLSA) fluctuating workweek (FWW) method of calculating overtime premium pay for salaried nonexempt employees. Under the FWW method (which remains permissible under federal law), overtime pay for salaried nonexempt employees may be calculated by (a) adding...
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