We have been tracking the status of the proposed changes to the white-collar overtime exemptions in the Pennsylvania Minimum Wage Act (PMWA) regulations. In January 2018, Governor Wolf announced that the Pennsylvania Department of Labor and Industry (DLI) would be proposing new regulations to amend the PMWA regulations that govern its overtime and minimum wage exemption requirements for executive, administrative, and professional salaried employees. DLI submitted a proposed rulemaking in June 2018 for new regulations.
As we outlined in a prior blog post, the DLI’s proposed regulations included both big increases to the minimum salary requirements and changes to the duties tests for the PMWA’s white-collar overtime exemptions.
After their publication on June 23, 2018, DLI accepted written public comments on the proposed regulations through August 22, 2018. Not surprisingly, public comments on the proposed regulations were mixed, with employer groups being sharply critical of the proposed changes, while employee groups generally expressed favor.
The state’s Independent Regulatory Review Commission (IRRC) is tasked with examining proposed regulations before they can take effect. On September 21, 2018, the IRRC published its comments on the proposed regulations. The IRRC concluded that DLI needed to do more to justify the proposed regulations and outlined a number of questions and concerns. The IRRC noted the large number of employees, businesses, and non-profit organizations that will be affected by the changes contained in the regulations should they take effect. The IRRC flagged the fact that the proposed salary increases would greatly exceed the national average for salary increases and the actions with undesirable consequences that employers may take in response to the changes. The IRRC also expressed concern about the effect a change to PMWA’s regulations may have in advance of possible changes to the FLSA regulations, which could create even more confusion and compliance difficulties. The IRRC concluded that, based on the explanation of the proposed regulation in its Preamble, it was unable to determine if the regulation would be in the public interest.
It is unclear at this stage what effect, if any, the IRRC’s negative comments on the proposed regulations will have on the process and any final regulations issued. Pennsylvania law directs the DLI to respond to all comments received from the IRRC and any other source, and we await DLI’s responses to the IRRC’s comments.
The ball is now in the DLI’s court to address the comments provided by the public and IRRC and to determine (1) whether to issue final regulations and, (2) if so, the contents of the final regulations.
We will continue to monitor the progress of the DLI’s efforts in this area and provide updates as warranted.