Pennsylvania Overtime Laws

If you’re a nonexempt worker putting in over 40 hours in a workweek, you should be paid accordingly. Pennsylvania overtime rules are governed primarily by the federal Fair Labor Standards Act (FLSA) and the state’s Minimum Wage Act (PMWA) and Wage Payment and Collection Law. Federal wage and hour law sets a minimum standard for employees across the country, including child labor, minimum wage, and overtime pay. States can provide workers with more rights and benefits than the FLSA offers.

This article examines Pennsylvania overtime laws and explains who’s entitled to overtime pay, how it is calculated, some common overtime violations, and an employee’s options for pursuing unpaid overtime. If you think your overtime pay rights have been violated, consider speaking with an employment law attorney.

Worker Classifications and Overtime Pay Rights

With few exceptions, nonexempt employees who work more than 40 hours a week are entitled to overtime pay. The law, not employers, determines your eligibility for overtime pay. Misclassifying an employee as an independent contractor or as an exempt employee is illegal. If the legal requirements for these exceptions to overtime pay aren’t met, the employee is entitled to overtime pay.

Independent Contractors

Independent contractors aren’t required to receive overtime pay under Pennsylvania law. Employers can’t avoid paying overtime to a nonexempt employee by designating them as an independent contractor. Both the FLSA and the PMWA apply a totality-of-the-circumstances analysis focused on the worker’s economic realities to determine if the worker is economically dependent on the employer. The economic realities of the working relationship determine employment status.

Exempt Employees

When it comes to overtime compensation, the distinction between exempt employees and nonexempt employees is key. Exempt employees are not entitled to overtime pay. Most exempt employees are paid on a salary basis, earn at least the required minimum salary, and perform job duties that qualify for a specific exemption. These include:

• Salary Pay: Some people equate the way an employee is paid (by salary vs. an hourly wage) with being exempt or nonexempt. Being paid a salary doesn’t mean you aren’t entitled to receive overtime. In addition to being paid on a salary basis, your actual job duties and weekly income determine if you are exempt from overtime.
• Minimum Salary: Under the federal Fair Labor Standards Act (FLSA), exempt employees must meet the minimum salary threshold of $684 per week ($35,568 annually). The Pennsylvania state law minimum salary threshold matches the FLSA.
• Job Duties: Overtime exemptions are referred to as “white-collar” exemptions. Pennsylvania‘s Minimum Wage Act and regulations recognize many of the same exemptions as the federal FLSA, but they are not identical. The key exemptions are for executive, administrative, or professional work. Additional exemptions apply to certain outside sales employees and to other workers in specific occupations.

Employers who misclassify workers, intentionally or not, are likely in violation of both state and federal laws.

How Overtime Is Calculated

How your employer calculates your overtime pay rate depends on how you are paid. Although the calculation varies, overtime is often based on your regular rate of pay, which may include more than just your hourly wage.

Standard Overtime Calculation

Pennsylvania state law mirrors federal law by requiring employers to pay “time and a half” your regular rate of pay for all hours worked beyond the 40-hour workweek. If your regular rate of pay is $10 an hour, your employer must pay you at least $15 an hour for any time worked over 40 hours in a workweek. This excludes any vacation or sick leave pay.

Unlike some states, Pennsylvania does not require daily overtime pay. Working nine hours as a nonexempt employee in a workday doesn’t warrant overtime pay, but putting in 44 hours in a workweek would qualify you for four hours at time-and-a-half.

Bonus and Commission

If you receive an hourly rate plus nondiscretionary bonus pay or commission, your regular rate of pay should include those amounts. As a result, your overtime rate may be higher than simply one and one-half times your hourly wage.

An employer determines a regular rate of pay by adding a worker’s hourly earnings and any bonus or commission earned during the workweek, then dividing that total by the number of hours worked. The employee is then paid an overtime premium based on that regular rate of pay for each overtime hour.

Salary Pay

For nonexempt employees paid on a salary basis, the regular rate of pay is the salary divided by the number of hours the salary is intended to compensate. It may not be common, but some salaried employees are eligible for overtime pay.

Some Common Overtime Violations

Overtime violations range from simple clerical payroll mistakes to willful attempts to avoid paying employees the proper rate. Whether an employer’s violation is accidental or intentional, employees may be entitled to recover unpaid overtime wages and other remedies under federal and Pennsylvania law. Here are some common overtime violations.

Misclassifying Workers

As discussed above, employers sometimes misclassify workers as independent contractors or as exempt employees to avoid paying them overtime. If done intentionally, employers may also face fines.

Averaging Hours Over the Pay Period

Your employer can’t average the hours of nonexempt employees over two or more weeks to avoid paying overtime. Under both federal and state laws, overtime is calculated on a single workweek-by-workweek basis. If you work 50 hours one week and 30 hours the next, your employer owes you 10 hours of overtime for the first week, even though your two-week average is 40 hours.

Under-Calculating Regular Rate of Pay

Overtime is calculated on your regular rate of pay. This isn’t always the same as your hourly wage. If you receive non-discretionary bonuses, shift differentials, or commissions, those amounts are included in your regular rate before calculating overtime. An employer who calculates overtime on your base hourly pay without accounting for bonuses and other compensation is underpaying you for your overtime hours.

Substituting Compensatory Time Off

Compensatory time off (CTO or “comp time”) is paid time off in lieu of paying overtime. CTO in place of overtime is often limited to certain public-sector employees under the FLSA. Private-sector employers in Pennsylvania must pay nonexempt employees overtime wages for hours worked over 40 in a workweek and not substitute CTO for overtime pay. One narrow exception includes private-sector employees covered by a collective bargaining agreement that permits CTO arrangements.

Off-the-Clock Work

Employers sometimes allow or even require employees to perform work before clocking in (for example, to prepare for a shift), after clocking out (for example, to clean up after a shift), during unpaid meal breaks, or while traveling between job sites. This off-the-clock time must be counted toward the 40-hour overtime threshold. Under the FLSA and PMWA, all time an employer “suffers or permits” an employee to work must be counted, whether or not the employer formally scheduled or authorized it.

Remedies for Overtime Violations

If your employer violates overtime laws, you may be entitled to recover more than just your unpaid overtime wages. Depending on the circumstances, you may also recover liquidated damages, attorney’s fees, court costs, and other relief available under the FLSA and Pennsylvania’s Wage Payment and Collection Law.

How To File a Wage Complaint

Pennsylvania employees can file overtime claims under both the federal FLSA and the PMWA. The two laws are not identical, so filing both can maximize the protections and remedies available under federal and state law. Information and forms are available at:

• U.S. Department of Labor, Wage and Hour Division
• Pennsylvania Department of Labor & Industry, Bureau of Labor Law Compliance

Employees also have the option of filing a civil lawsuit against their employer for unpaid overtime.

There are time limits (statutes of limitations) for filing a wage complaint:

• Two years under the FLSA for non-willful violations
• Three years under the FLSA for willful violations
• Three years under the PMWA

If you believe you’re owed overtime, file sooner rather than later. Waiting may reduce the period of back pay you can recover. Missing the filing deadline may prevent you from recovering at all.

Retaliation Prohibited

Your employer can’t retaliate against you for filing a wage claim. If you complain about unpaid overtime, file a wage claim, or cooperate with a government investigation into wage violations, your employer is prohibited from retaliating against you under the FLSA and state law. Retaliation includes adverse actions such as firing you, demoting you, or reducing your hours. If you experience retaliation for asserting your overtime rights, you may have a separate legal claim in addition to your wage claim.

Review Your Overtime Claim With an Attorney

Your paycheck must include all overtime pay you’re entitled to. If you think you’re entitled to overtime pay and your employer disagrees, a local employment law attorney with experience in wage law and overtime regulations may be able to help. They can examine your claim, explain your options, and help you navigate the legal requirements for proving your claim.