Pennsylvania Overtime Compensation Salary Threshold Raised

As of October 3, 2020, the salary threshold for qualifying as an exempt executive, administrative and professional (EAP) employee in Pennsylvania has increased for the first time in more than 40 years. These new regulations expand eligibility for overtime for more than 140,000 people and offer additional overtime protections for over 250,000 more.

Federal overtime regulations were updated in January 2020, increasing the salary threshold to $35,568. The salary threshold will continue to increase as part of a three -phase rollout, with the final phase anticipated by Oct. 3, 2022.  This final phase will increase the EAP salary threshold to $45,500. Beginning in 2023, the salary threshold will be adjusted automatically every three years based on the average wages of Pennsylvania occupations that are exempt.

Pennsylvania law requires that employers pay their employees a rate of no less than $7.25 per hour for all hours worked, with an overtime rate of 1.5 times the employees regular working hours for any hours worked over 40 in a standard work week.  The new overtime regulations allow up to 10 percent of the salary threshold to be satisfied by nondiscretionary bonuses, commissions, and employer incentives.