PA Chamber expressed concern with “divisive” overtime expansion rule

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Pennsylvania Chamber of Business and Industry (PA Chamber) President Gene Barr released a statement last week criticizing Gov. Tom Wolf’s plan to move forward with a “harmful” overtime rule for the state.

“We urge the Governor to recognize that this policy cannot be considered in a vacuum: many employers most adversely impacted – including nonprofit organizations, colleges and universities, restaurants and small retailers – are also among those who have been hit hardest by the pandemic, business shutdown and economic fallout,” Barr said.  “Imposing additional costs and removing workplace flexibility is detrimental to employers already struggling and just adds one more obstacle on Pennsylvania’s path to economic recovery.”

According to the Department of Labor & Industry, the rule updates the Minimum Wage Act’s regulations to expand eligibility for overtime and strengthen protections for residents, with the final rule updating the salary threshold to reflect current wages paid to Pennsylvania employees working in executive, administrative, and professional occupations. The rule also aligns duties tests for executive, administrative, and professional workers more closely with those in the Fair Labor Standards Act’s federal overtime regulations, which were updated on Jan. 1, 2020.

The new overtime rule went into effect on Oct. 3 after the final approved regulation was published in the PA Bulletin.

Barr stated that proposal has been controversial since President Barack Obama released a federal version that was strongly opposed by a diverse coalition and was ultimately struck down by an Obama-appointed judge.

“The proposal will harm many workers as well,” Barr added. “Employers unable to absorb additional costs will be forced to shift salaried employees into hourly positions so that hours can be tracked and capped to avoid overtime costs.  Employees may technically be eligible for overtime pay, yet they lose the flexibility and predictability that comes with earning a salary with no guarantee of additional wages.”