Recently, Governor Tom Wolf announced new regulations that would support and grow the middle class by modernizing and strengthening overtime pay rules, according to a press release issued by the governor’s office. This will ensure that almost half a million salaried workers in Pennsylvania will receive the overtime pay they have earned.
Pennsylvania uses the federal overtime rule established in 2004, requiring overtime pay for salaried workers earning $455 per week — $23,660 a year — or less. The hourly value of that salary diminishes rapidly with each hour of uncompensated overtime, according to a press release issued by the governor’s office.
The state government last raised the threshold by regulation in 1977, setting it at $250 a week. If that had been adjusted for inflation, the overtime threshold for salaried workers now would be about $1,000 per week, based on the federal government’s inflation formula.
Gov. Tom Wolf announced a plan to increase the overtime threshold over three years, making 460,000 more salaried workers eligible for overtime by 2022. It will take about a year for regulatory approval. The three-year phase-in would begin in 2020, with an increase to an annual salary of $31,720, $610 per week; followed in 2021 by an increase to $39,832, $766 per week; and to $47,840 a year, $920 a week, in 2022.
The Pennsylvania Chamber of Business and Industry claims that the rule will harm workers by reducing scheduling flexibility and forcing employers to cut hours and pay.
That mirrors its argument against a higher minimum wage, however, as unemployment rates plummet and wages increase in states surrounding Pennsylvania that have increased the minimum wage. Likewise, California, New York and several other states have mandated overtime thresholds beyond the federal standard.
Wolf’s decision is a too-rare acknowledgment by the Pennsylvania government that fair compensation acknowledges the value of work.
Our workers haven’t had a minimum wage increase in 10 years, unlike each of our neighboring states. Updating the overtime rules is an important step towards fair wages and ensuring people are paid for their work. For too long Pennsylvanians have worked long hours and received less of a reward. Everyone who works hard and plays by the rules should be paid fairly so they can support their families and gain economic security. Governor Wolf will continue to support initiatives that strengthen Pennsylvania’s working and middle class.