Pennsylvania Exempt Employee Minimum Salary Requirements to Increase Above Federal Level

Labor and Employment Alert

We hope you are navigating in this very uncertain environment, your workforce is staying healthy, and your business is thriving.  As you may have seen, the CDC recently announced that their recommendations now include fewer mitigation efforts.  This is fantastic news, as it represents yet another important milestone in our journey toward a post-pandemic community.

In just over six months, Pennsylvania’s minimum salary requirements for exempt (salaried) employees are set to increase above the federal minimum standard. Ever since Pennsylvania’s Minimum Wage Act was passed in 1968, it has mirrored the minimum wage levels and salary exemption minimums set forth in the Fair Labor Standards Act. That is about to change.

On October 3, 2021, the Pennsylvania Minimum Wage Act is set to increase the salary level; the salary threshold will rise to $780 per week ($40,560 per year). Anyone not paid at least $780 per week will not qualify for the white-collar exemptions and will therefore be treated as a non-exempt (hourly) employee, who must track their hours worked and be paid overtime at the rate of one-and-one-half-times their hourly rate for all hours worked over 40 in a workweek.

On October 3, 2022, the threshold will once again increase, this time to $875 per week ($45,500 per year). This is a 28% increase above the current $684 per week level and a 92% increase above the 2019 minimum salary threshold.

On October 3, 2023, the annual salary threshold will be set at a “rate equal to the weighted average 10th percentile wages for Pennsylvania workers who work in exempt executive, administrative or professional classifications as determined by the Department with advice and consultation by the Minimum Wage Advisory Board and based on an annual wage survey of all worker classifications conducted by the Department.”

The salary threshold will then be increased every three years thereafter, i.e., October 2026, October 2029, etc.

With the increased salary levels, we anticipate greater enforcement efforts by the Pennsylvania Department of Labor. Accordingly, in addition to reviewing salary levels, employers should review jobs, job descriptions and to ensure all employees are classified properly.

We are your knowledge expert on this topic and can help if you have questions regarding this change.  Please contact any of us for specific information.

Scott Nick – (814) 449-8445

Bob Hooks – (412) 518-0353

Beth Pellegrino – (814) 431-3992