Among the numerous policies included in budget-related legislation passed last week was a one-sentence provision that has significant implications for many Pennsylvania employers.
Part of the final budget deal between the Republican-majority legislature and Democratic Gov. Tom Wolf was an agreement to repeal an administration proposal initiated in 2018 to dramatically and continually expand the range of employees eligible for overtime pay (i.e. the requirement to pay time-and-a-half for every hour over 40 worked in a given week).
The PA Chamber has led a diverse coalition opposing this rule, including the nonprofit community, higher education, healthcare institutions and the restaurant industry. Many employers reported they would be unable to afford these higher costs in the years ahead and would be forced to convert salaried employees to hourly workers so hours could be tracked and capped each week. Employees expressed concern at the prospect of losing their salary status and the associated flexibility and benefits.
As this rule progressed through the regulatory process the PA Chamber launched several grassroots advocacy campaigns and worked with the state legislature to pass a concurrent resolution to disapprove of the rule, which the Governor subsequently vetoed.
The repeal of this rule represents significant relief for Pennsylvania employers, many of whom continue to struggle recovering the pandemic, shutdown orders and economic fallout.