HARRISBURG — Stephen Herzenberg, economist and executive director of the Keystone Research Center, issued the following statement in the wake of the Wolf Administration’s submission to the Independent Regulatory Review Commission (IRRC) of a final regulation raising the pay level below which salaried workers in Pennsylvania will automatically receive overtime pay in the future. Dr. Herzenberg is available to comment on the issue.
“Today, Governor Wolf took a major step towards improving the lives of hundreds of thousands of overworked and underpaid Pennsylvanians by lifting to $45,500 the annual pay level below which salaried workers will automatically receive overtime pay when they work more than 40 hours. Salaried employees with sometimes-inflated titles and always deflated pay packets—in department stores and fast food, branch banking and health care providers, construction, manufacturing, and other sectors—will now get back the 40-hour work week and time with their family, or the extra pay they have until now been cheated of every week.
“More than 60% of U.S. salaried workers once received time-and-a-half pay automatically for working long hours—because exemption from overtime was only intended to apply to high-level managers and professionals who are well-compensated without overtime. But over the nearly 50 years since the mid-1970s, businesses have increasingly taken advantage of the good will and work ethic of salaried employees putting in 45, 50, or 55 hours for as little as $10 to $12 per hour.
“Nearly 400,000 Pennsylvania salaried employees (394,000) will benefit from the updated overtime threshold compared to the existing federal rule ($23,600 annually). About 200,000 more workers will benefit compared to when the new federal rule issued in September by the U.S. Department of Labor ($35,568) goes into effect.
“The overtime rule, where Governor Wolf has the authority to act independently to help Pennsylvania workers (subjected to the expected approval by the IRRC), offers a striking contrast to the minimum wage, where the legislature must act, but keeps sitting on its hands. The governor’s action should inspire legislative leaders to demonstrate that they also recognize the need to make the economy less rigged against Pennsylvania’s working families. Unless, of course, those legislative leaders want to send the message that the rigged status quo is fine by them.”
For background on the overtime rule, see this August 2018 KRC briefing paper released in response to the original Wolf overtime rule proposal.