On Aug. 5, new Pennsylvania wage-and-hour regulations for tipped and salaried, nonexempt workers under the Pennsylvania Minimum Wage Act (PMWA) went into effect. This article focuses exclusively on the new rules for salaried, nonexempt employees.
Under the new regulation, 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 pay due, the regular rate is multiplied by 1.5 and then multiplied by the number of hours worked in excess of 40 in that workweek.
The new PMWA salaried, nonexempt overtime formula is a departure from the federal 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 adding the employee's salary and all other remuneration that must be included in the regular rate, dividing that total compensation by the total hours worked in a workweek, multiplying this rate by 0.5 to determine the half-time rate, and multiplying the half-time rate by the number of overtime hours worked.
The federal FWW method cannot lawfully be used for Pennsylvania salaried, nonexempt...
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