Employers planning for a long-anticipated expansion to overtime eligibility next week are being reminded that the proposal was in fact rescinded this past June.
The regulation was first proposed by the Wolf Administration in June 2018 several years after the courts struck down a similar proposal from the Obama Administration. The rule sought to significantly and regularly expand the population of employees eligible for overtime pay, or time-and-a-half pay for hours worked beyond 40 in a week. Gov. Wolf’s proposal, like the federal predecessor, was met with strong opposition from a range of employers, and the PA Chamber led a diverse coalition including nonprofits, the higher education and healthcare communities and small businesses opposing the rule.
Employers unable to afford higher labor costs would be forced to convert salaried employees to hourly status so hours could be tracked and capped. Employees earning a salary and benefiting from the flexibility also expressed displeasure at the prospect of being required to clock in and clock out, with no guarantee of higher wages.
The first eligibility expansion that would move Pennsylvania beyond the federal standard was scheduled to take effect next weekend, on Oct. 3, 2021. However, during the course of budget negotiations this past June, lawmakers advocated for the rule to be repealed, and the Governor ultimately agreed as part of the final budget deal. The PA Chamber issued this press release in response.