Pennsylvania employers with salaried, nonexempt employees working in the commonwealth may need to adjust how they calculate overtime premiums for these employees in light of amendments to the Pennsylvania Minimum Wage Act that will go into effect on August 5. The amendments codify that Pennsylvania employers cannot use the fluctuating workweek method of calculating overtime pay for salaried employees.
Specifically, employers must calculate the regular rate of pay for salaried, nonexempt employees by adding up all remuneration paid to the employee during the workweek and dividing this amount by 40 hours.[1] This change in the Pennsylvania Minimum Wage Act (PMWA) is a significant divergence from the federal Fair Labor Standards Act (FLSA), which permits employers to determine the regular rate of pay for salaried, nonexempt employees by dividing all remuneration the employee earned by the total hours the employee worked that workweek. This change in the PMWA will result in potentially greater overtime pay for salaried, nonexempt employees in Pennsylvania.
In light of this change in the law, Pennsylvania employers with salaried, nonexempt employees should review how they calculate overtime premiums for these employees and make any adjustments to make sure they are in compliance.
Under both the FLSA and PMWA, employers must pay nonexempt employees overtime at 1.5 times the employee’s regular rate of pay for all hours worked over 40 hours in a workweek. Under...
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