$10.00/hour. The regular rate for salaried employees who are not exempt from overtime is all remuneration paid to the employee divided by 40 hours. This rate must be used to calculate other wage and hour requirements such as overtime and spread of hours. Members may download one copy of our sample forms and templates for your personal use within your organization. Effective January 1, 2022: Minimum Wage $12.56. Ohio - $9.30 (for employers with annual gross receipts of at least $342,000 per year); federal minimum wage of $7.25 for other employers Oregon - $13.50 (effective July 1, 2022) Puerto Rico - $8.50 Rhode Island - $12.25 South Dakota - $9.95 Vermont - $12.55 Virginia - $11.00 Washington - $14.49 The Pennsylvania Department of Labor and Industry (DLI)publishedits final rule to substantially increase the salary threshold for qualifying as an exempt executive, administrative and professional (EAP) employee under the Pennsylvania Minimum Wage Act (PMWA). The United States Department of Labor (USDOL) published its revised final regulations concerning its overtime requirements under the FLSA on September 24, 2019. InFact Sheet 17U, the Wage and Hour Division of the United States Department of Labor explains that incentive compensation that is announced to employees in advancee.g., production bonuses and commission payments based on a fixed formulaqualify as nondiscretionary payments. Please enable scripts and reload this page. Can an employee be required to work overtime? This increase impacts the 2022 salary thresholds for overtime exempt workers; specifically, to be exempt from overtime pay, an employee needs to be paid at least $1,014.30 per week ($52,743.60 annually). What are examples of work that is not part of the tipped occupation? Effective January 1, 2022, the minimum salary threshold for these exemptions are: Employers with 1-25 employees: $58,240 per year. If you believe you are owed money by your employer, please file a complaint using the, . The bill should have separate lines for the 18% service charge and for the patron to provide a tip or gratuity if they so desire. Current regulations require employers to keep accurate records of the following: occupation of employees and the hours in that occupation. For these two exemptions, the state generally sets the minimum salary requirement at 75 times the state minimum wage, which differs based on the region of the state. Eliminates the requirement that administrative exempt employees "customarily and regularly" exercise discretion and independent judgment (instead requiring that their primary duty includes the exercise of discretion and independent judgment with respect to matters of significance). We previously wrote about these regulationsand the impact they would have on Pennsylvania employers. Note: There is also a professional exemption under state law. A hotel housekeeper's directly supporting work includes stocking the housekeeping cart. This is a 28% increase above the current $684 per week level and a 92% increase above the 2019 minimum salary threshold. Build specialized knowledge and expand your influence by earning a SHRM Specialty Credential. No, this updated regulation will not change overtime pay calculations for hourly employees. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. The DLI's new overtime exemption regulations increase the minimum salary requirement for the PMWA's white-collar overtime exemptions as follows: $684 per week ($35,568 annually) on October 3, 2020 (note: this is the current level required by the FLSA and has been in effect since January 1, 2020); All remunerations must be considered during the week that the remuneration is paid. This article was written by Terri Dougherty of J. J. Keller & Associates, Inc. Get the information and products you need to stay on top of industry changes and comply with regs. J. J. Keller helps you increase safety awareness, reduce risk, follow best practices, improve safety training, and stay current with changing regulations. An employee is entitled to at least minimum wage and overtime pay at time and a half for all hours worked over 40 hours per week. We protect people and the businesses they run.. Below is the California Minimum Wage increase schedule for exempt employees. The previous minimum salary of $937 for these employees. In June 2021, Governor Wolf agreed to repeal the final rule relating to the threshold increases in exchange for additional funding for public schools. $25.40 regular rate x 10 hours of overtime x 1.5 time and one-half = $381 overtime pay. However, the federal Fair Labor Standards Act (FLSA)does not require overtime pay for "any employee engaged in a bona-fide executive, administrative, or professional capacity" who is paid on a salaried basis instead of an hourly wage and meets the minimum salary threshold defined in federal regulations. Other rights and protections are offered as well. $54,080. The Minimum Wage Act Regulations can be found on the Pennsylvania Bulletin website at34 Pa. Code Chapter 231. Duties that do not generate tips and are not directly related to duties that generate tips include (but are not limited to) painting, taking inventory of backroom supplies, ordering supplies, scheduling, cleaning bathrooms. Colorado: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. Example 1: A supervisor working at a bar takes a drink order from a patron, makes the drink, delivers the drink, and clears the table when the patron is finished. Annual Salary. 201219) which exempts employees of third party employers. include several of the definitions set forth in the FLSA regulations, including: the definitions of department or subdivision, two or more other employees, or particular weightall of which are relevant for the interpretation and application of the executive exemption (29 C.F.R. Last week, the employee worked 50 hours and earned $500 in commissions. If an employee performs nontipped duties for more than 20% of the workweek, must their employer pay them $7.25 base wage for all the hours they work that week or just the hours they worked non-tip-generating duties over the 20% threshold? 1130 12th Ave., Suite 200 Altoona, PA 16601-3486 Phone: 1-877-792-8198 or 814-940-6224, 1301 L&I Building 651 Boas St. Harrisburg, PA 17120-0019 Phone: 1-800-932-0665 or 717-705-5969, 110 North 8th St. Suite 203 Philadelphia, PA 19107 Phone: 215-560-1858 or 1-877-817-9497, 301 5th Ave. These regulations clarify that for the purpose of calculating overtime the regular rate is based on a 40-hour work week. Please enable scripts and reload this page. Include any version of the FLSA's regulation extending the professional exemption to employees with a primary duty of teaching at an educational establishment (29 C.F.R. No more than $3.02 per hour in tip income may be used to offset the minimum wage of tipped employees. Looking for a new job? The salary threshold will then be increased every three years thereafter, i.e., October 2026, October 2029, etc. }); if($('.container-footer').length > 1){ Anyone not paid at least $780 per week will not qualify for the white-collar exemptions and will therefore be treated as a non-exempt (hourly) employee, who must track their hours worked and be paid overtime at the rate of one-and-one-half-times their hourly rate for all hours worked over 40 in a workweek. The employee is owed $1,375 for that week of pay including their $1,000 weekly salary plus $375 in overtime pay for the ten hours of overtime they worked. The minimum annual salary for exempt employees, currently at $35,568, would increase to more than $56,000 if the DOL adjusts the rate from its 2016 proposed rule for inflation. Virtual & Washington, DC | February 26-28, 2023. $1,125.00 per week ($58,500.00 per year) Under state law, employers can pay 85 percent of the minimum wage to workers ages 14-15. Example 2: A manager in a restaurant takes food orders and refills some drinks while a tipped employee delivers food to the table and refills drinks. Being paid on a "salary basis" means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRMs permission. Minimum Wage and Exempt Employee Thresholds to Increase in 2023, Whats the Standard? Pennsylvania Exempt Employee Minimum Salary Requirements to Increase Above Federal Level By: Jeffrey S. Stewart Labor and Employment Alert 3.22.21 . Employers should always be aware of local jurisdictions that have implemented similar increases. The state minimum wage also governs the exempt employee threshold salary, which has increased accordingly. The rule increased the threshold for an exempt employee to $684 per week ($35,568 annually) effective Oct. 3, 2020; $780 per week ($40,560 annually) effective October 3, 2021; and to $875 per week ($45,500 annually) effective October 3, 2022. I pay a non-exempt salaried employee a salary of $1,000 per week. $('.container-footer').first().hide(); On October 3, 2022, the minimum weekly salary for exempt employees in Pennsylvania will rise again to $875 per week ($45,500 per year). It also sets forth compliance-related duties for the Department of Labor & Industry and for employers. 2021 $10.30. [34 Pa Code 231.43. 2020 $9.45. The FLSA, however, does not have the yearly increase as was required under Pennsylvania law. Cleaning the kitchen or bathrooms is not part of the tipped occupation of a busser. Along with minimum wage increases, several state laws have corresponding increases to the states applicable exempt employee salary thresholds. Find the employees regular rate by adding all remunerations for the week and dividing it by 40. It should be further noted that some state and local 2023 increases have already taken effect as some jurisdictions implement the change throughout the year (in July 2022 for example). At the end of that 4week period, it was determined that the employee earned a variable production bonus of $200 across the entire 4week period. [Read more]. (29 CFR 541). Nick & Associates: Employee Morale - Click for More Details, Pennsylvania Website Design. A discretionary bonus, in contrast, is one in which the employer retains discretion both as to the fact of payment and as to the amount until a time quite close to the end of the period for which the bonus is paid (such as a surprise holiday bonus). On October 3, 2023, the annual salary threshold will be set at a rate equal to the weighted average 10th percentile wages for Pennsylvania workers who work in exempt executive, administrative or professional classifications as determined by the Department with advice and consultation by the Minimum Wage Advisory Board and based on an annual wage survey of all worker classifications conducted by the Department.. Minimum Wage for Employers with 25 Employees or Less. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. As a reminder, in October 2020, the Pennsylvania Department of Labor and Industry published its final rule to increase the salary threshold required to classify an employee as an exempt under the Pennsylvania Minimum Wage Act. Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. Over a 4week period, the employee worked 40, 50, 44, and 46 hours. For the outside sales employee exemption, there is no minimum salary requirement. Unless they are employed in an occupation specifically exempted by the Pennsylvania Minimum Wage Act or Fair Labor Standards Act, employees must receive pay for hours worked in excess of 40 in a workweek at a rate not less than one and one-half (1) times their regular rate of pay. 541.106). Regular rate] for salaried employees whose overtime pay is determined by the fluctuating workweek method will take effect August 5, 2022. With the increased salary levels, we anticipate greater enforcement efforts by the Pennsylvania Department of Labor. A bartender's directly supporting work includes work such as slicing and pitting fruit for drinks, wiping down the bar or tables in the bar area, cleaning bar glasses, arranging bottles in the bar, fetching liquor and supplies, vacuuming under tables in the bar area, cleaning ice coolers and bar mats, making drink mixes, and filling up dispensers with drink mixes. The minimum salary level required for an employee to be considered exempt will be $684 per week, or the equivalent to $35,568 per year, and will take effect on January 1st, 2020. $875 per week ($45,500 annually) effective October 3, 2022. eliminates the requirement that executive exempt employees customarily and regularly exercise discretionary powers; and. The new federal regulations took effect on January 1, 2020. Among the minimum wage bills in Congress is the Raise the Wage Act would increase the minimum wage to $9.50 per hour upon passage and gradually raise it to $15 per hour. The definitions of "primary duty," "customarily and regularly," "directly and closely related" or any of the other provisions of 29 C.F.R. To be classified as exempt from overtime under state law, administrative, professional and executive employees must satisfy certain salary and duties tests and receive a salary that exceeds 3,000 times the state minimum wage divided by 52. The information on this blog is published AS IS and is not guaranteed to be complete, accurate, and or up-to-date. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. Yes, employers are able to dictate the time of day and hours employees work with the exception of Act 102 Prohibition of Excessive Overtime in Health Care Act. Last week, the employee worked 50 hours, including 8 hours after 6:00pm. Managers, supervisors, or employers can only receive tips from patrons if they provide the entire service on their own, without assistance. Nevada has a two-tier minimum wage system based on qualifying health benefits. In 2022, they must make $9.25 per hour. Due to an increase in the state's minimum wage, the minimum salary required for the administrative, professional and executive exemptions from overtime under state law increased to $796.17 per week on January 1, 2023. A non-exempt employee is paid a salary of $1,000 per week, plus commissions. Sign up for news, regulatory updates, compliance tips, deals and more. Automatic three-year minimum salary adjustment. Tip-producing work: Janets tip-producing work includes making and serving drinks, talking and serving food to customers at the bar, keeping the bar organized as she prepares drinks, and wiping down the surface of the bar where customers are sitting. The final regulation also makes modest revisions to the duties test, designed to more closely align the PMWA with its FLSA counterpart. Here are some key things to know for both federal exemptions and state exemptions, along with some state-specific changes for 2023. Fully updated for March 2017! The DLIs October 2020 overtime exemption regulations increased the minimum salary requirement for the PMWAs white-collar overtime exemptions to $684 per week ($35,568 annually) on October 3, 2020, which matched the current level required by the FLSA. Pennsylvania employees otherwise exempt under the duties test but making less than the specified minimum weekly salary must be paid overtime for all hours worked in excess of 40 in a workweek at a rate of not less than 1.5 times the employee's regular pay rate. Exempt computer employees may be paid at least $684 * on a salary basis or on an hourly basis at a rate not less than $27.63 an hour. The minimum salary for exempt employees in New York City remains at $1,125 per week or $58,500 per year. What businesses must explain that a service fee is not a gratuity/tip? Members can get help with HR questions via phone, chat or email. Managers, supervisors, or employers can only receive tips from patrons if they provide the entire service without assistance. As of August 5, 2022, updated rules affecting tipped workers and salaried workers who work a fluctuating work week schedule are in effect. Beginning January 1, 2023, these employees must earn at least: $53.80 per hour (for all hours worked); or A monthly salary of $9,338.78; and An annual salary of $112,065.20 Colorado: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. In some jurisdictions, the employee divided by 40 exemption, There is also a professional under... ] for salaried employees who are not exempt from overtime is all remuneration to. The minimum salary of $ 1,000 per week or $ 58,500 per.! Make $ 9.25 per hour in tip income may be considered Attorney Advertising time and one-half $! 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