Regulatory board expands Pa. overtime rules, upping stakes in minimum wage debate

A statewide regulatory body has approved expanded overtime rules that will help tens of thousands of lower-wage managers make time-and-a-half, putting the final nail in a compromise that would have raised Pennsylvania’s minimum wage to $9.50 an hour.

Friday’s action by the Independent Regulatory Review Commission was met with instant criticism from business leaders, who said it would hurt small business owners by raising wage costs, prompting them to offer fewer hours to employees.

“Many small business owners submitted comments explaining this excessive expansion of overtime will cause them financial turmoil, leading to fewer hours for employees, and a limit on future promotions for those who have just moved from hourly to salaried positions,” Rebecca Oyler, of the Pennsylvania branch of the National Federation of Independent Businesses, said in a statement. “This hurts young managers or rising stars who just gained more responsibility and limits their ability to move higher on the workplace ladder.”

Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry, similarly pronounced himself “disappointed” by the board’s vote.

“In 2018, during the initial phase of the review process, hundreds of opposition comments were submitted from a wide range of stakeholders – including nonprofits, higher education, local governments, small businesses among many others who described unsustainable cost increases and harm to workplace morale as employees are forced to be shifted from guaranteed salaries to hourly clock-in, clock-out positions,” Barr said in a statement. “Many of these concerns were echoed by IRRC, which directed the Department to re-engage with stakeholders and submit a revised proposal for consideration.”

Last year, as part of a comprise with Republican legislative leaders, Democratic Gov. Tom Wolf agreed to back off from his push to raise the overtime threshold in exchange for the minimum wage hike. The Senate passed the bill, but it never came to a vote in the House.

Earlier this week, Wolf declared the deal dead and said he would renew the overtime expansion. Wolf is again seeking to raise the minimum wage, now $7.25 an hour, to $12 an hour, then incrementally to $15 an hour, with future increases tied to inflation. Republican leaders, as they have for years, have said they’re not interested.

Stephen Herzenberg, executive director of the pro-union Keystone Research Center in Harrisburg said about 200,000 salaried employees statewide will benefit from the new rule “compared to the new federal rule that went into effect earlier this month ($34,568 annually), including 82,000 newly eligible for overtime pay and the rest getting strengthened overtime protection (they should be paid overtime now but often are not; since their salary is below $45,500 it will now be crystal clear they should get overtime).”