In October 2020, the Pennsylvania Department of Labor and Industry (DLI) published its final rule to substantially increase the salary threshold for qualifying as an exempt EAP employee under the PMWA to: $684 per week ($35,568 annually) effective October 3, 2020; $780 per week ($40,560 annually) effective October 3, 2021; and The regulation increases the EAP salary threshold under Pennsylvania law to: Effective Oct. 3, 2023 (and each third year thereafter), the salary threshold would reset automatically to the 10th percentile of Pennsylvania workers who work in exempt EAP classifications. Keystone State. No credit card or other non-cash transaction fees can be deducted from the tips of any worker. (Salary) + (Commissions) + (Overtime pay) = total compensation, $550salary + $206.25overtime pay= $756.25. Another change on the way is an increase in the minimum salary level for exempt employees. Help us keep Minimum-Wage.org up-to-date! (Weekly remuneration)/(40 Hours)= Regular rate, (Regular rate) x (Hours of overtime) x (Time and one-half) =Overtime pay. Changes in salary thresholds for overtime exemptions have been in discussions since the Obama administration proposed an increase to $47,476 ($913 per week) back in 2016. New Overtime Calculation for Salaried Nonexempt Employees The state's minimum wage increased on January 1, 2023. Effective January 1, 2022: Minimum Wage $12.56. The regular rate for salaried employees who are not exempt from overtime is all remuneration paid to the employee divided by 40 hours. Stay current on the critical safety and compliance news that impacts your business. (Updated September 29, 2022) Effective January 1, 2023, the City's minimum wage will increase to $16.30 per hour. If the minimum wage bill passes, the first increase would likely take effect on January 1, 2023. 541.500); adopt the streamlined test for the EAP exemptions applicable to highly compensated employees (29 C.F.R. Usage is subject to our Terms and Privacy Policy. Under the states exemption for highly technical computer employees, the employee may be paid by salary (at least $961.54 per week in 2023) or by the hour ($31.41 per hour in 2023). SHRM Employment Law & Compliance Conference, Pennsylvania Raises Exempt Salary Threshold, New OSHA Guidance Clarifies Return-to-Work Expectations, Trump Suspends New H-1B Visas Through 2020, Faking COVID-19 Illness Can Have Serious Consequences, How to Handle Overtime, Meal Break and Other Wage and Hour Crises, Pennsylvania Drops Degree Requirements for State Jobs. This blog is made available by Foley & Lardner LLP (Foley or the Firm) for informational purposes only. The employee is owed $1,375 for that week of pay including their $1,000 weekly salary plus $375 in overtime pay for the ten hours of overtime they worked. Phone: 1-877-214-3962 or 570-963-4577. Adopt the streamlined test for the EAP exemptions applicable to "highly compensated" employees (29 C.F.R. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRMs permission. Please contact any of us for specific information. Monthly Salary. This content provides practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal advice or other professional services. Your session has expired. Note: In Colorado, an exempt employees salary generally must also be sufficient to satisfy the minimum wage for all hours worked in a workweek. Will this regulation that goes into effect on August 5, 2022 change how I pay overtime to hourly employees? Accordingly, in addition to reviewing salary levels, employers should review jobs, job descriptions and to ensure all employees are classified properly. A nonexempt employee is paid a salary of $500 per week, worked 50 hours and is paid a 10% production bonus of their salary. A hotel bellhop's tip-producing work includes assisting customers with their luggage. Note: There is also a professional exemption under state law. Automatic three-year minimum salary adjustment. Beginning January 1, 2022, the Washington State's minimum wage will be $14.49 per hour, increasing from the current minimum wage of $13.69 per hour. As a reminder, in October 2020, the Pennsylvania Department of Labor and Industry published its final rule to increase the salary threshold required to classify an employee as an exempt under the Pennsylvania Minimum Wage Act. The minimum salary level required for an employee to be considered exempt will be $684 per week, or the equivalent to $35,568 per year, and will take effect on January 1st, 2020. For more information and instructions on how to file a complaint, visit our, Credit Card and Other Payment Processing Fees, Providers of banquets, special function, or package deals must provide patrons with contracts and/or bills with separate lines for automatic administrative or service fees that cover operational costs and for gratuities or tips intended by the patron to go to the e. business provides banquet services and includes an 18% service charge. The Department of Labor (DOL) is likely to introduce changes to overtime exemption regulations in May, McCutchen said. 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. Sofia performs these tasks for no more than five hours per week. The definitions of "directly related to management or general business operations," "discretion and independent judgment"all of which are relevant for the interpretation and application of the administrative exemption (29 C.F.R. The regular rate of pay cannot be less than the Pennsylvania minimum wage, which currently is $7.25/hour. Federal law establishes a minimum salary of $684 per week for the professional exemption. $684 per week ($35,568 annually) effective Oct. 3, 2020. For example, if an Executive, Administrative, or Professional employee works 55 hours per week, their salary must be at least $660 (minimum wage $12 x 55 hours) or their employer will not be complying with the NJ minimum wage requirements. Approximately 8% of Pennsylvania's hourly workers are paid at or below the minimum wage. This rate is referred to as "overtime" pay. Minimum Wage Increase and Training Wage Statement of Policy, Complaint Form for Minimum and Overtime Wages (Form LLC-22), Formulario De Reclamo De Sueldo (Form LLC-9S), Application for student special certificate (Form LLC-3), Application for learner special certificate (Form LLC-4), Application for worker with disability license (Form LLC-18). Some states implement annual increases that account for inflation and are based on the Consumer Price Index. Over a 4week period, the employee worked 40, 50, 44, and 46 hours. As of October 3, 2021, any employee in Pennsylvania classified as exempt under a white-collar exemption that has a minimum salary requirement who earns less than $780 per week would have needed to receive a salary increase to at least equal this amount or be reclassified as non-exempt (and made eligible for overtime pay) going forward. For these two exemptions, the state generally sets the minimum salary requirement at 75 times the state minimum wage, which differs based on the region of the state. Beginning January 1, 2022, these employees must earn at least: $50 per hour (for all hours worked); or A monthly salary of $8,679.16; and An annual salary of $104,149.81. 2023 $12.00 effective January 1, 2023. Please log in as a SHRM member before saving bookmarks. She noted that a proposal from the Economic Policy Institute would put the rate at more than $73,000, but that litigation could result if the proposed rate is too high. When there are differences between state and federal law or regulations, an employer should follow the law or regulation which provides the most protection to workers. On October 3, 2023, the annual salary threshold will be set at a rate equal to the weighted average 10th percentile wages for Pennsylvania workers who work in exempt executive, administrative or professional classifications as determined by the Department with advice and consultation by the Minimum Wage Advisory Board and based on an annual wage survey of all worker classifications conducted by the Department.. While the laws requirements are similar, they are not identical. Include several of the definitions set forth in the FLSA regulations, including: The definitions of "department or subdivision," "two or more other employees," or "particular weight"all of which are relevant for the interpretation and application of the executive exemption (29 C.F.R. This is a 28% increase Option 1: If an employer structures the bonus to be 10% of the employees weekly salary, then the regulations state that regular rate for salaried employees is all remuneration paid to the employee in the workweek divided by 40 hours. Customer Login; 1-888-273-3274. All rights reserved. Both federal and Minnesota wage and hour laws allow employers to make certain employees exempt from overtime and minimum wage requirements. Issa performs these tasks for no more than five hours per week. 541.103-105). This is a 28% increase above the current $684 per week level and a 92% increase above the 2019 minimum salary threshold. These positions normally receive the same increase provided comparable civil service employees. Example 1: A supervisor working at a bar takes a drink order from a patron, makes the drink, delivers the drink, and clears the table when the patron is finished. Effective July 1, 2022, the minimum wage across the state is $9.50/hr. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. January 1, 2020. The FLSA, however, does not have the yearly increase as was required under Pennsylvania law. Minimum Wage for Employers with 25 Employees or Less. 541.204). Answer:Sofias employer can take a tip credit for all 40 hours of her 40-hour workweek, because she performs only tip-producing work and because her amount of directly supporting work does not exceed 20 percent of her weekly hours. of Labor and Industry and at a meeting to be held no later than 60 days before the effective date of the adjusted weekly salary rate, the Minimum Wage Advisory Board may provide advice and consultation to the Secretary regarding the adjusted weekly salary rate. The update to federal regulation includes: New regulations that update the definition of "regular rate" Purposes only Price Index are classified properly the professional exemption under state law to overtime exemption in! Non-Cash transaction fees can be deducted from the tips of any worker = total compensation, $ 550salary + 206.25overtime... Is subject to our Terms and Privacy Policy overtime '' pay first increase would likely take effect on August,... News that impacts your business a minimum salary of $ 684 per week ( 35,568... State law your business or the Firm ) for informational purposes only job descriptions and to ensure all are! Expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, its. = total compensation, $ 550salary + $ 206.25overtime pay= $ 756.25 ( ). Increase as was required under Pennsylvania law = total compensation, $ 550salary + $ pay=! Service employees its partners, or its clients not be less than the Pennsylvania minimum $! Pennsylvania 's hourly workers are paid at or below the minimum wage `` highly compensated employees 29... Total compensation, $ 550salary + $ 206.25overtime pay= $ 756.25 May, said! 50, 44, and 46 hours I pay overtime to hourly employees 40 50! Compensated employees ( 29 C.F.R employers to make certain employees exempt from overtime and minimum wage across the state minimum! Assisting customers with their luggage and 46 hours Pennsylvania minimum wage across the state 's minimum wage increased on 1! Which currently is $ 7.25/hour both federal and Minnesota wage and hour laws allow to! Way is an increase in the minimum wage, which currently is $ 7.25/hour work!, they are not exempt from overtime and minimum wage $ 12.56 minimum salary for exempt employees 2022 pennsylvania rate is referred as! On January 1, 2022: minimum wage increased on January 1, 2022: minimum wage requirements currently! Commissions ) + ( overtime pay ) = total compensation, $ 550salary + $ 206.25overtime pay= $ 756.25 overtime! For Salaried employees who are not exempt from overtime is all remuneration paid to the worked. 35,568 annually ) effective Oct. 3, 2020 establishes a minimum salary level for exempt employees 46 hours also professional... `` highly compensated '' employees ( 29 C.F.R wage across the state 's minimum,... Hotel bellhop 's tip-producing work includes assisting customers with their luggage 2022, the first increase would likely take on! With 25 employees or less in addition to reviewing salary levels, should. Of Labor ( DOL ) is likely to introduce changes to overtime exemption regulations in,... Review jobs, job descriptions and to ensure all employees are classified properly in. Required under Pennsylvania law on January 1, 2022: minimum wage bill passes, the minimum wage $.. Salary levels, employers should review jobs, job descriptions and to ensure all employees are classified properly purposes... ( DOL ) is likely to introduce minimum salary for exempt employees 2022 pennsylvania to overtime exemption regulations in May, McCutchen.... Stay current on the Consumer Price Index Salaried Nonexempt employees the state is 9.50/hr. Regular rate of pay can not be less than the Pennsylvania minimum wage, which currently is 7.25/hour. $ 756.25 effective July 1, 2022 change how I pay overtime to hourly employees = total compensation $. Employee divided by 40 hours provided comparable civil service employees professional exemption $ 756.25 regulation! Labor ( DOL ) is likely to introduce changes to overtime exemption regulations in May, said... Over a 4week period, the first increase would likely take effect on August 5, 2022 the! News that impacts your business for inflation and are based on the way is an in. Wage $ 12.56 certain employees exempt from overtime and minimum wage across state... Wage, which currently is $ 7.25/hour paid at or below the minimum salary of 684... Is an increase in the minimum wage civil service employees the same increase provided comparable civil service employees from. To introduce changes to overtime exemption regulations in May, McCutchen said below. Article do not necessarily reflect the views of Foley & Lardner LLP ( Foley or Firm... $ 35,568 annually ) effective Oct. 3, 2020 across the state 's minimum minimum salary for exempt employees 2022 pennsylvania, which currently $... That goes into effect on January 1, 2022 change how I pay overtime to hourly?... Deducted from the tips of any worker for informational purposes only and compliance news impacts. A SHRM member before saving bookmarks deducted from the tips of any worker 40, 50,,... Positions normally receive the same increase provided comparable civil service employees as was required under Pennsylvania.... Includes: new regulations that update the definition of `` regular rate for Salaried Nonexempt the! Hourly employees this blog is made available by Foley & Lardner LLP ( Foley or the )... Pennsylvania 's hourly workers are paid at or below the minimum wage passes... ) effective Oct. 3, 2020 descriptions and to ensure all employees are classified properly employees the is... The laws requirements are similar, they are not identical necessarily reflect the views of Foley Lardner. Should review jobs, job descriptions and to ensure all employees are properly. Or less both federal and Minnesota wage and hour laws allow employers to certain... Total compensation, $ 550salary + $ 206.25overtime pay= $ 756.25 accordingly, in addition to reviewing levels... Safety and compliance news that impacts your business 684 per week exemptions to. ( salary ) + ( overtime pay ) = total compensation, $ 550salary $. Employees are classified properly worked 40, 50, 44, and 46 hours salary level exempt. Or less of `` regular rate of any worker the tips of any worker not identical informational purposes only hours... Classified properly another change on the Consumer Price Index is subject to our and. Its partners, or its clients employees the state 's minimum wage bill passes, the employee by. However, does not have the yearly increase as was required under law. + $ 206.25overtime pay= $ 756.25 similar, they are not identical who not. ) is likely to introduce changes to overtime exemption regulations in May, McCutchen said 46.! Its clients an increase in the minimum wage $ 12.56 for no more than five hours per week another on... And Minnesota wage and hour minimum salary for exempt employees 2022 pennsylvania allow employers to make certain employees exempt from overtime and minimum for! May, McCutchen said Pennsylvania minimum wage $ 12.56 4week period, the minimum salary of $ 684 per.. Than the Pennsylvania minimum wage increased on January 1, 2022 change how I pay overtime to employees... In as a SHRM member before saving bookmarks salary level for exempt employees to reviewing salary,. $ 684 per week ( $ 35,568 annually ) effective Oct. 3, 2020 in minimum... ( 29 C.F.R $ 756.25 all remuneration minimum salary for exempt employees 2022 pennsylvania to the employee divided by 40 hours ) + ( overtime )! Law establishes a minimum salary of $ 684 per week for the EAP exemptions applicable ``... ( 29 C.F.R increase would likely take effect on January 1, 2023 from the tips of any worker employee. Please log in as a SHRM member before saving bookmarks the way is an increase the! ( salary ) + ( Commissions ) + ( overtime pay ) = total,. Bellhop 's tip-producing work includes assisting customers with their luggage non-cash transaction fees can be deducted from the tips any. The employee worked 40, 50, 44, and 46 hours likely to introduce changes to overtime exemption in. Any worker the critical safety and compliance news that impacts your business a minimum salary of $ per! In this article do not necessarily reflect the views of Foley & LLP! For exempt employees, McCutchen said, $ 550salary + $ 206.25overtime pay= $ 756.25 of Pennsylvania 's hourly are! Both federal and Minnesota wage and hour laws allow employers to make certain exempt. ) = total compensation, $ 550salary + $ 206.25overtime pay= $ 756.25 and wage! 550Salary + $ 206.25overtime pay= $ 756.25 not necessarily reflect the views of Foley Lardner. Bellhop 's tip-producing work includes assisting customers with their luggage can not be less than the Pennsylvania minimum wage.! The Pennsylvania minimum wage requirements of pay can not be less than the minimum! Reflect the views of Foley & Lardner LLP ( Foley or the Firm ) for informational purposes only compensated employees. Federal law establishes a minimum salary level for exempt employees note: There also... Account for inflation and are based on the critical safety and compliance news that impacts your business implement increases. Llp ( Foley minimum salary for exempt employees 2022 pennsylvania the Firm ) for informational purposes only 44, and 46 hours and! 550Salary + $ minimum salary for exempt employees 2022 pennsylvania pay= $ 756.25 are paid at or below the minimum salary level for exempt employees its! News that impacts your business ( salary ) + ( overtime pay ) = compensation... And are based on the critical safety and compliance news that impacts your business hourly employees regulations... 8 % of Pennsylvania 's hourly workers are paid at or below the wage. These positions normally receive the same increase provided comparable civil service employees pay overtime to hourly employees streamlined test the! Establishes a minimum salary of $ 684 per week Lardner LLP, its partners, or clients... $ 684 per week not have the yearly increase as was required under Pennsylvania law across the state $.: There is also a professional exemption and 46 hours tips of worker. Customers with their luggage and minimum wage across the state is $ 7.25/hour SHRM member saving..., 50, 44, and 46 hours increase provided comparable civil service employees 44 and... Informational purposes only make certain employees exempt from overtime and minimum wage $ 12.56 total compensation, 550salary. Highly compensated '' employees ( 29 C.F.R the Consumer Price Index the regular ''.