Pennsylvania businesses, counties, and colleges oppose expanding overtime pay

The proposed regulation from Gov. Wolf’s administration would make more workers eligible for overtime.

Cash stock photo
Pictures of Money / Flickr
Sarah Anne Hughes

HARRISBURG — In January, Gov. Tom Wolf proposed a change to the state’s overtime rules that would mean, according to his administration, higher wages for nearly half a million workers.

But already, business groups, county governments, and colleges have come out strongly against the proposal. The proposed regulation would raise the threshold under which “executive,” “administrative,” and “professional” salaried employees must be paid overtime. Currently, employees who make at least $455 a week and meet a set of criteria based on their duties are exempt from overtime. From the January announcement:

The first step will raise the salary level to determine overtime eligibility for most workers from the federal minimum of $455 per week, $23,660 annually, to $610 per week, $31,720 annually, on Jan. 1, 2020. The threshold will increase to $39,832 on Jan. 1, 2021, followed by $47,892 in 2022, extending overtime eligibility to 370,000 workers and up to 460,000 in four years.

Sound familiar? It should if you follow news about the Fair Labor Standards Act, the federal law that establishes both minimum wage and overtime pay.

In 2016, President Barack Obama’s administration finalized a proposal which, like Wolf’s, would have raised the salary threshold for overtime pay. The left-leaning Economic Policy Institute estimated that 12.5 million workers would have directly benefited. “Would have” being key, as a federal judge struck down the rule in 2017, and the Justice Department under President Donald Trump declined to defend it.

With the feds not expected to release new overtime rules until 2019, Pennsylvania’s Department of Labor & Industry took a cue from the EPI and proposed its own rule earlier this year.

The public comment period closed Aug. 22 and a perusal of responses shows similar reaction to the Obama-era rule, with chamber groups and individual business owners writing to oppose the regulation.

The president of Rosemont College wrote in her letter the Montgomery College school would have to reclassify 34 workers from salaried to hourly. The County Commissioners Association of Pennsylvania claimed the increased salary threshold could lead to higher property taxes if the state doesn’t appropriate more money to local governments. And the U.S. Chamber of Commerce warned that “Pennsylvania is repeating the same mistakes by using the invalidated federal regulation as the template for this proposal.”

A spokesperson for Labor and Industry said by email, “The department is reviewing the feedback and has up to two years to submit the final regulations.”

“Protecting the middle class and promoting Jobs That Pay has been an important part of Gov. Tom Wolf’s agenda from day one,” the spokesperson continued. “Modernizing Pennsylvania’s outdated overtime rules would ensure that hundreds of thousands of hard-working Pennsylvanians receive the overtime pay that they deserve.”

An analysis of how many workers would benefit from Wolf's proposed overtime rules by county

An analysis of how many workers would benefit from Wolf's proposed overtime rules by county

Screen shot / Keystone Research Center

While the majority of the responses to the draft showed opposition, the proposal was supported by organized labor and some nonprofits.

Community Legal Services of Philadelphia wrote that 27 of its paralegals would likely fall under the new proposal, but that the phase-in period “will allow nonprofit organizations like us ample time to gradually adjust to the higher overtime threshold — and adequate lead time to plan for it from a budgetary standpoint.”

Also in support of the proposal is the progressive Keystone Research Center. In a paper released in August, the Harrisburg-based center’s executive director, Stephen Herzenberg, called the draft regulation “a modest proposal to inject a bit more fairness into the Pennsylvania economy.”