Pennsylvania Chamber of Business and Industry President and CEO Gene Barr recently issued a statement urging the Independent Regulatory Review Commission and lawmakers to reject a revised proposal from the PA Department of Labor & Industry’s (L&I) to update overtime eligibility rules in Pennsylvania.
L&I submitted the final regulation to overhaul Pennsylvania’s overtime rules to the state’s Independent Regulatory Review Commission and legislative oversight committees last week. The Independent Regulatory Review Commission must approve the final regulation before it takes effect.
“This proposal is only minimally different from the Department’s initial proposal, which the PA Chamber opposed along with a broad range of stakeholders including nonprofits, higher education, local governments, small businesses among many others who described unsustainable cost increases and harm to workplace morale as employees are forced to be shifted from guaranteed salaries to hourly clock-in, clock-out positions,” Barr said. “Hundreds of opposition comments were submitted to the Independent Regulatory Review Commission, which ultimately echoed many of the same concerns and directed the Department to re-engage with stakeholders.”
According to a press release from L&I, the rule will increase the salary threshold to determine overtime eligibility for salaried executive, administrative and professional workers from $455 per week, $23,660 annually, to $875 per week, $45,500 annually.
This increase will be phased in over three years at $35,568 annually on January 1, 2020, $40,560 annually in 2021 and $45,500 annually in 2022. The salary threshold will adjust automatically every three years, starting in 2023. The thresholds in the revised rules are lower than those in the original proposed updated from June 2018.
According to L&I, these increases will extend overtime eligibility to 143,000 workers over the three years.
Barr, however, said that the revised rule does not account for concerns brought up by employers during the rulemaking process.
“As part of the rulemaking process the PA Chamber and a number of local chambers of commerce, at the request of the Department, convened roundtable meetings around the Commonwealth with employers from different sectors of the economy who shared their perspective on the unintended, but profoundly harmful, impact of this proposal,” Barr said. “This included publicly-funded nonprofits who can’t raise prices and would likely be forced to cut services to vulnerable residents.
“Unfortunately, these concerns were largely disregarded in the Department’s latest version of the rule. We urge the Independent Regulatory Review Commission and lawmakers to consider the true impact of this proposal and reject it.”