Pennsylvania Overtime Laws

September 15th 2024

Under the Pennsylvania overtime laws, employees are entitled to receive overtime compensation for the hours they put in.

Pennsylvania Labor Laws follow the federal Fair Labor Standards Act (FLSA) which sets the maximum number of hours an employee has to work (40 in a workweek) before overtime can be considered.

This article will provide you with the information to successfully navigate Pennsylvania’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

Pennsylvania Overtime Rates

In Pennsylvania, employees who work over 40 hours in a single workweek must be compensated at a rate of 1.5 times their normal hourly rate. This applies to all employees except those who are exempt from overtime or if their employer is not required to comply with this regulation for a certain reason.

Since the regular Pennsylvania minimum wage is $7.25 per hour, that makes Pennsylvania’s overtime rate $10.88 per hour (1.5 times the minimum wage).

Overtime Entitlement in Pennsylvania

The majority of employees in Pennsylvania must be provided with overtime pay for their overtime hours.

Employees who earn below $875 a week and those who are non-exempted are entitled to receive overtime pay.

However, your overall entitlement for overtime pay will be based on what your job duties are as well as what type of business you are in.

Refusing To Work Overtime in Pennsylvania

If your employer has scheduled you for overtime hours, you are required to comply. If you choose to refuse to work overtime, your employer may invoke disciplinary action upon you which can lead to termination.

However, this rule can be changed if an agreement or a collective bargaining agreement (CBA) was made prior.

An exception is made under the Prohibition of Excessive Overtime in Health Care Act. This act states that healthcare workers shall not be subjected to working overtime unless predetermined and agreed to.

Overtime for Salaried Employees in Pennsylvania  

Salaried employees in Pennsylvania can be eligible for overtime compensation. 

An employee’s eligibility is not determined by merely receiving salary-based pay. Job duties and employment contracts are factors that are considered as well.

According to the Pennsylvania Minimum Wage Act (PMWA), to calculate the regular rate for salaried employees, employers are required to divide an employee’s weekly pay by 40 hours rather than including overtime hours. By doing that, employers will be giving a higher overtime rate to their employees. 

Let’s assume that an employee makes a salary of $1,000 this week. His hours differ weekly, but his salary remains the same. This week, he worked a total of 50 hours. Following the PMWA, his total overtime compensation would be:

Regular Hourly Rate (RHR) = Weekly salary / 40 hours

$1,000 / 40 

= $25

Total Overtime Pay = RHR x 1.5 x OT hours

$25 x 1.5 x 10 

= $375

The amount will vary according to your hours worked and salary amount.

Calculating Overtime with Commission Pennsylvania

Employees in Pennsylvania who receive commissions are eligible for overtime at a rate of 1.5 times their regular hourly rate. Their regular hourly rate must include the commissions earned as well.

For example, let’s say an employee works 45 hours a week at a rate of $10/hour and receives $100 in commissions for that week. We need to first calculate the new regular hourly rate.

To do so:

(Total hours x Hourly Rate) + Commission

= (45 x 10) + 100

= $550

Then, divide that by the total hours worked in the week.

= 550 / 45

=$12.22 (new regular hourly rate)

To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.

$12.22 / 2

= $6.11 (commission employees overtime rate)

Since the employee worked an extra 5 hours in the week, that makes his overtime compensation $30.56 ($6.11 x 5 hours).

The amount will vary according to the hours worked, hourly rate, and commission earned.

Overtime Exceptions and Exemptions in Pennsylvania 

Pennsylvania’s labor laws require employers to pay overtime to most employees who work more than 40 hours in a workweek. However, some occupations are exempt from these regulations. Here are some examples:

  • Farm Workers who are involved in crop production, animal husbandry, or related activities
  • Sailors who are employed on a vessel or boat 
  • Salesmen, Partsmen, or Mechanics who primarily deal with vehicles, such as cars or trucks.
  • Taxi Drivers who drive taxis or other passenger vehicles 
  • Motion Picture Theater Workers 
  • Executive, Administrative, and Professional Employees who earn more than a certain amount per week
  • Workers who live and work in cities or towns with a population of 100,000 or less, provided that the city is not included in a larger metropolitan statistical area with a total population of over 100,000
  • Employees who reside in cities or towns with a population of 25,000 or less if they are located within a standard metropolitan statistical area, but at least 40 miles away by air from the main city in that area.

Misclassifying Employees in Pennsylvania

Employers tend to misclassify their employees as “independent contractors” to exempt them from overtime pay.

Based on Pennsylvania law, an employer can face different levels of charges if they intentionally misclassify their employees.  

Such misclassified employees can be eligible to receive back wages and maybe even additional compensation if their employer fails to comply with overtime laws.

It is advisable to consult with an attorney regarding employee misclassification as penalties may vary based on the severity of the case.

Legal Cases Relating to Overtime Compensation in Pennsylvania

Below, we present law cases relating to fair overtime compensation for employees in Pennsylvania: 

1. Former University Employee Seeks Overtime Back Wages After Being Misclassified as an Independent Contractor

In the case of Solkoff v. Pennsylvania State University, Joel Solkoff claimed that Penn State University had failed to provide him with overtime compensation as they misclassified him as an independent contractor.

Solkoff states that he had always been treated as an employee at Penn State during his duration of employment. He was required to provide timesheets, was subject to their policies and guidelines, and was also given access to their facilities. 

Despite all that, Penn State classified him as an independent contractor and did not pay him for the overtime hours that he worked. Penn State also denied any misconduct on its part and wanted to dismiss Solkoff’s lawsuit.

A settlement was proposed, which included $97,500 in exchange for letting go of all claims made. $35,288 of that sum was to be for attorney fees and $62,211 for Solkoff. However, this settlement agreement also included a confidentiality clause and release of claims. This contradicts the purpose of protecting employees under FLSA. 

This resulted in the court not moving forward with the settlement. 

Key lessons from this case:
  • It is important to clearly define an employee/worker’s duties and entitlements in the employment contract to avoid future disputes.
  • Although a settlement agreement was presented, the court was able to see how certain aspects, such as the releasing of claims, can undermine an employee’s rights under FLSA.
  • Despite not settling, this case shows that employees can rely on the judicial system to be in their best interests.

2. Healthcare Service Companies to Pay $2.4 Million to Employees for Overtime Back Wages

Mother-daughter duo, Anna Zaydenberg, owner of Elder Resource Management, Inc. (ComForCare Home Care), and Marsha Simonds, owner of Staff Source (recruiting and staffing agency), were sued by the United States Department of Labor (DOL) for failing to provide overtime compensation to their employees.

Zaydenberg and Simonds led their workers’ overtime hours records to Staff Source to avoid paying overtime. Their employees were employed under ComForCare, the healthcare service provider, but received paychecks from both ComForCare and Staff Source. This is a form of payroll manipulation to show that there are less than 40 hours of work on each paycheck.

Zaydenberg and Simonds sought to get the case dismissed by arguing that the FLSA would not apply to their company providing personal services to customers in their own homes. 

The court denied their argument to dismiss the case. The case was then settled in 2022, with the employees receiving a total of $ 2.4 million in overtime back wages as well as liquidated damages.

Key lessons from this case:
  • This case shows that two employers can both be held accountable for overtime violations if they both share control over their employees.
  • Employers who alter an employee’s paycheck to report an incorrect number of hours worked violate overtime laws.
  • Employers who knowingly violate overtime laws can be held liable for additional costs that go beyond damages and overtime back wage compensations.
  • Arguments based on misinterpretation of labor laws may not hold up in court, employers need to be aware of the scope of their responsibility and that of their entities.

3. Retail Company Agreed to $1 Million Settlement for Miscalculating Employees’ Overtime Rate

In the case of Chevalier v. General Nutrition Centers, Tawny L. Chevalier and Andrew Hiller claimed that their former employer, General Nutrition Centers (a retail company), had violated the Pennsylvania Minimum Wage Act (PMWA) when calculating their overtime pay.

GCN had followed the Fluctuating Workweek (FWW) method of multiplying overtime hours by 0.5 instead of the standard 1.5 rate. 

GNC argued that their calculations should be allowed as it was aligned with the FWW, which is under the federal Fair Labor Standards Act (FLSA). The Pennsylvania Supreme Court rejected the use of the FWW method for calculating the employees’ overtime compensation.

The court then clarified that employees in Pennsylvania should be compensated at a rate of 1.5 times their regular hourly rate for any hours worked above 40 in a week. 

GNC ultimately agreed on a settlement of $1,378,494 (plus interest) to be distributed to employees.

Key lessons from this case:

  • This case shows that sometimes, rate calculation between federal and state law can be different.
  • This case emphasizes the need for employees and employers to adhere to the PMWA overtime legislation standards.
  • In Pennsylvania, employers need to review their policies to ensure fairness to employees.

Learn more about Pennsylvania Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.