Pennsylvania Labor Laws for Salaried Employees

The starting point for all labor laws in the United States is the federal Fair Labor Standards Act that sets a minimum standard for salaried workers in all states. Federal protections include setting wage and overtime requirements, but allow states to increase protections.

Pennsylvania state labor laws echo many of the federal laws and offer even greater protection in some areas. Anyone living or working in Pennsylvania would do well to get an overview of these labor laws.

The federal government waded into the labor law area with the Fair Labor Standards Act of 1938 (FLSA), and it applies to workers in every state. However, the federal legislation specifies that it does not preempt state law, at least not entirely.

State governments have the right to enact their own laws protecting employees, including wages and working conditions, as long as they do nothing to cut back on the standards set in the FLSA's protections.

A state is not allowed to reduce protections. For example, the FLSA defines a workweek, sets overtime pay, and establishes a countrywide minimum wage for workers. No state can enact laws that cut back on any of the federal provisions, but they can enact employment laws if those laws provide employees with more or additional protections.

Pennsylvania is one of the states that enacted labor laws piggy-backing on the FLSA. These are administered and enforced by the state Bureau of Labor Law Compliance, part of the Pennsylvania Department of Labor and Industry.

These laws include the Prevailing Wage Law, Minimum Wage Law, Child and Seasonal Farm Labor Law, Equal Pay and Wage Collection Law and several other labor laws.

Most people are aware of the minimum wage laws that set a floor on the wages a covered employer can pay to their workers. The FLSA established a minimum wage in 1938, and Congress has upped the amount several times.

Still, the current federal minimum wage is the extremely low sum of $7.25 an hour, giving a worker who puts in 40 hours a week only $290 per week.

States are free to set a minimum wage that is higher than this amount, but legislation setting a lower minimum wage will not be effective. Workers are entitled to rely on whichever law, federal or state, that offers the greater protection.

Many states offer minimum wage protection to their workers that is higher than the federal amount. But Pennsylvania is one of the states that does not. The current minimum wage in Pennsylvania is $7.25 per hour, which is the same as the federal minimum wage.

Tipped employees in Pennsylvania can be paid as little as $2.83 an hour, but the tips must raise the worker's average hourly pay to the federal minimum wage.

The minimum wage law has the most impact when applied to hourly workers. But it can and does impact salaried workers. In fact, it applies to all "non-exempt" workers, salaried or not.

A non-exempt full-time worker's salary cannot be less than the applicable minimum wage times the standard workweek set in the FLSA of 40 hours. That is, the minimum salary for a non-exempt worker in Pennsylvania would be $290 a week.

What is an exempt worker? These are workers whose jobs are specifically excluded from the protections of the FLSA. Some refer to those holding exempt positions as "white collar" workers because the four main exemption areas are:

• Executive employees.
• Administrative employees.
• Professional employees.
• Outside sales employees.

Note that there are other exempt jobs outside of these four categories, and not all can properly be considered white collar. These include farm workers and individuals employed by certain seasonal and recreational establishments

The exempt category terms are defined in the Department of Labor regulations. Since Pennsylvania uses the same definitions as the FSLA, these same categories of employees are exempted in the state as well. It is important to understand what each category comprises.

• ‌​Executive:​‌ Salaried workers are considered in executive positions if they are in management and have at least two other employees working under them. They cannot spend more than 20 percent of their work time doing other work tasks, or 40 percent if they are in retail.

• ‌​Administrative:​‌ Workers exempted from the FLSA as administrative workers facilitate business operations, develop management policies or lead administrative training. They have the same work-time ratios as executives and cannot spend more than 20/40 percent of their work time on other matters.

• ‌​Professional:​‌ These workers are employees offering advanced knowledge, education and training. Professional workers include those who are employed as artists, certified teachers and computer professionals. Their job duties are primarily intellectual and involve exercising their own discretion and judgment in pursuing assignments. The same 20/40 ratios apply.

• ‌​Outside sales:​‌ Workers whose jobs involve making sales or taking orders outside of their employer's main workplace are exempted as outside salespersons. To be in this category, they must spend at least 80 percent of their time doing sales work.
  

​If a worker's job fits the DOL definition of one of these positions, they are exempt from both the minimum wage and overtime provisions of the FLSA. Note that exemptions are narrowly construed against the employer asserting them.

They are applied on an individual workweek basis, so that workers who perform exempt and non-exempt duties in the same workweek are generally not exempt in that period.

Overtime laws also apply to both hourly and salaried workers as long as they are nonexempt. But it's important to understand what overtime protection means.

Don't bank on overtime laws limiting the hours workers have to put in at the job. Nothing in the federal or Pennsylvania labor laws set any kind of limit on mandatory overtime for adult workers.

If an employer wants an employee to work seven days a week, 10 hours a day, the labor laws do not prevent them from mandating this work schedule, but they will have to pay them a higher hourly wage.

The sole exception to this is found in Pennsylvania state law, the Prohibition of Excessive Overtime in Health Care Act. It prohibits hospitals and other health care facilities from requiring excessive overtime work from salaried and non-salaried employees who are in direct and frequent contact with patients.

The law was enacted to make sure that doctors and nurses are not overworked to the extent that they make potentially dangerous mistakes.

The FLSA and Pennsylvania law leaves the number of hours that a job requires to the parties to negotiate as part of an employment contract. Both the Fair Labor Standards Act and Pennsylvania law allow employers to demand overtime of all employees 16 years old or older. The employer is permitted to dismiss an employee who refuses to work overtime.

But once the employee puts in a regular workweek, defined in federal regulations as 40 hours in any consecutive seven-day period, overtime pay at a higher rate is required. Once the employee puts in 40 hours, every additional hour in the seven-day period the employee works must be paid overtime at time-and-a-half.

Thus the employer requiring seven 10-hour days in a workweek would regularly be paying overtime for 30 of those 70 hours.

Both overtime and regular wages of a minimum wage worker are determined by the minimum wage rate. Those working at the Pennsylvania minimum wage of $7.25 an hour will get $10.88 per overtime hour.

But note that the overtime protections are not limited to minimum wage workers. Nonexempt employees earning an hourly wage above the minimum wage are still entitled to 150 percent of their regular hourly wage as overtime.

How to calculate hourly wage for a worker who earns a weekly salary? The employer must divide the weekly regular rate of pay by the weekly hours. For example, if a salaried worker is required to work 50 hours a week and earns $500 a week, they make $10 an hour. That means that the employer is required to pay the employee overtime (150 percent of $10) for every hour over 40, or $15 an hour.

Note that if the sum arrived at by dividing the weekly salary by the hours worked is under the minimum wage, overtime remuneration is calculated by dividing the wage by 40. For example, if the 50-hour-a-week employee earned a weekly salary only of $350 a week, their hourly wage would be $7.00 an hour.

Since this is under the minimum wage, overtime would be calculated by dividing the weekly wage ($350) by 40. The resulting hourly wage of $8.75 would be used for the 150 percent overtime computation, yielding an overtime wage of $13.12.

Pennsylvania is largely an at-will employment state. That means that businesses in the state can terminate workers without notice and without "good cause." If an employment contract provides otherwise, as is often the case for union employees, different rules apply.

As described above, if an employer asks a person to work 10 hours a day seven days a week, they must do so as long as the employer pays overtime. Workers refusing to do so can be fired in Pennsylvania.

An employer cannot discriminate against workers or fire them because of their race, gender, religious background or ethnic background. Some types of termination violate the employees’ right to have a workplace free from discrimination, a right under federal labor law.

This means that an employee cannot be given better or worse job conditions based on these categories. Workers of one race or gender cannot be granted more favorable work schedules or longer breaks than employees of other backgrounds.

When it comes to addressing the issue of unpaid leave time, the federal law at issue is the Family and Medical Leave Act (FMLA). This law, like the FLSA, applies to all those who work for employers who have at least 50 employees. Both Pennsylvania employers and those in other states are required to follow the FMLA.

This federal law gives eligible employees the right to take up to 12 weeks per year of unpaid leave if needed for caregiving ill relatives or due to their own illness.

Those workers who take FMLA time off are guaranteed the right to continue group health benefits and the right to be reinstated to their position or a similar position with the same salary, benefits and other employment options when their leave is over.

Pennsylvania supplements this time-off law with state law requiring employers to allow employees to take time off work for military duty or service.

As with the FLSA, when a worker returns from military leave, the employer must reinstate them to their former position or a similar one. They cannot be the subject of discrimination because of their service.

Employers in Pennsylvania must also permit unpaid time off work for employees to serve on jury duty. Nor can employers reduce the worker's seniority or other employment benefits because of serving on a jury.

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