Wolf taking steps to expand who gets OT pay in Pennsylvania
HARRISBURG – Stymied by Republicans in his effort to pass a law raising the minimum wage, Democratic Gov. Tom Wolf is moving to boost pay in Pennsylvania through another means — by making hundreds of thousands of additional salaried employees eligible for overtime pay, administration officials said Wednesday.
The proposed regulation extending overtime to more salaried employees would need approval only from a five-member board whose members are appointed by Wolf, two top Republican lawmakers and two top Democratic lawmakers, giving it a 3-2 Democratic majority.
The approval process could take more than a year, and raising the overtime threshold would strengthen the middle class, boost the economy and help make wages fairer, administration officials said.
“It’s simple. If you work overtime, then you should get paid fairly for it,” Wolf said in a statement. “This important step will put more money into the pockets of hardworking people and will help expand the middle class in Pennsylvania.”
But it is likely to draw fire from business owners, who cheered when federal courts blocked a similar move by former President Barack Obama. Worker-advocacy groups say that some employees often put in far more than 40 hours a week and end up making less than the minimum wage.
California, New York and a handful of other states with higher minimum wages require overtime pay for salaried workers above the federal baseline, management consultants say.
Wolf’s administration said the regulation would phase in the increase over three years and eventually cover 460,000 more salaried workers. It would require that salaried workers earning up to almost $48,000 a year in 2022, or about $920 a week, get time-and-a-half pay for any time they work over 40 hours in a week. In 2020, the threshold would rise to $31,720 annually, or $610 per week, and in 2021 to nearly $40,000, or $766 per week.
Pennsylvania’s current threshold is set at the federal baseline of $23,660, or $455 per week, which took effect in 2004. The state last raised its overtime threshold by regulation to $250 per week in 1977, the administration said. That is comparable to about $1,000 in today’s dollar value, using the federal government’s online inflation calculator.
The move comes after Wolf has spent three years fruitlessly asking the Republican-controlled Legislature to increase the state’s minimum wage, which is set at the federal minimum wage of $7.25 an hour.
Republican lawmakers haven’t budged on Pennsylvania’s minimum wage, leaving Pennsylvania in the bottom half of states.
Obama’s administration tried in 2016 to more than double the federal overtime threshold by regulation to $47,476, or $913 a week, but it was blocked by a federal court in Texas after 21 states sued and it was never enforced. Still, some businesses had adjusted pay scales or overtime pay policies to accommodate Obama’s rule before the court blocked it.
President Donald Trump’s administration has not taken action to increase the federal baseline for overtime pay.