Update on Overtime and Minimum Wage in PA

At the end of August only a few days before Labor Day, a federal judge struck down the new rule issued by the Labor Department during the Obama administration to make more than 4 million workers eligible for time and a half overtime by setting a higher salary threshold for the overtime exemption. The Obama administration rule released in May 2016 would have doubled the threshold to exempt executive, administrative and professional employees from overtime to $47,476 from $23,660.

This has been largely anticipated. The Obama Administration rules were set to go into effect on December 1, 2016. However, twenty-one states and many business groups challenged the new regulation in federal court. A preliminary injunction halted implementation of the regulation in November pending a final ruling. After inauguration day, the Trump Administration did not defend the regulation. Instead, it is expected to set a new overtime exemption above $23,660 but below $47,476. The labor department is taking public comments through Sept. 25, 2017.

Since Labor Day just passed, there was also plenty of other news on the wage front:

PA State Senator Daylin Leach reintroduced a bill into the legislature seeking to raise the minimum hourly wage in PA to $15 an hour. The proposed bill will also index the minimum wage to inflation. This is the third consecutive legislative session that Leach has introduced the bill. Earlier this year, PA Governor Tom Wolf’s budget proposal included a hike to a $12 minimum wage for the state. Last year, Wolf increased wages for state employees and contractors to a minimum of $10.15 an hour.

Pennsylvania’s minimum hourly wage currently stands at $7.25, the minimum permitted by federal law. A report published by the Keystone Research Center at the end of August titled The State of Working Pennsylvania 2017 detailed the impact on Pennsylvania worker wages from remaining at $7.25.

Pennsylvania borders six states and each has raised the minimum wage above the federal set a provides for a higher minimum wage. Among the state’s neighbors, Ohio is the lowest with an hourly wage of $8.15 an hour. New York is the highest with $9.70 an hour. In New York City, the minimum wage is $10.50 for small employers of 10 employees or less. New York State rates are expected to increase each year on December 31st until they reach $15 per hour.

Each of the surrounding states has also raised their minimum wage since December 2013. New York and Maryland have raised their rates the most: 34% and 28% respectively. West Virginia, New Jersey and Delaware have each raised their minimum wage more than 10% between December 2013 and July 2017. Maryland, Ohio, New Jersey and New York will all raise their minimum wage further as January 2024 approaches.

If we hear of any developments on either the overtime exemption or minimum wage in Pennsylvania, we will continue to post them here.