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New Federal Overtime Rules for 2020

New federal overtime rules to go in effect Jan. 1, 2020. While this change does not impact the Pennsylvania minimum wage (yet), it will allow 61,000 more workers to be eligible for overtime. The new federal overtime regulations apply to hours employees who work more than 40 hours a week and salaried employees who work more than 40 hours per week while earning less than $684 per week/$35,568/year. The current threshold for salaried employees, enacted in 2004, is annual earnings of $23,600, or $455 per week.

“This final regulation ensures that employees who work overtime are fairly and fully compensated for their labor in accordance with the original intent of the Pennsylvania minimum wage act.” - PA Department of Labor & Industry

Governor Wolf's administration is seeking to increase that threshold with changes that would phase in an annual earnings cap of $45,500 over two years, starting in 2021 making 82,000 more Pennsylvania workers eligible for OT. However, this state-level change is still being leveraged against the proposed minimum wage rate hike (increased to $8 beginning July 1, 2020, to $8.50 beginning Jan. 1, 2021, $9 beginning July 1, 2021, and $9.50 beginning Jan. 1, 2022). This bill has passed the senate but is awaiting movement in the state house.

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