Small business advocates oppose overtime overhaul

Listen to this article

Business groups are speaking out against extensions to the state’s overtime eligibility requirements that will qualify 82,000 more Pennsylvania workers for time-and-a-half pay by 2023, approved this week by the state Independent Regulatory Review Commission (IRRC).

In 2021, the workers making an annual income of less than $40,560 and $780 per week will be eligible to receive overtime pay at a time-and-a-half rate. In 2022, this threshold moves to $45,500 and $875, respectively. Combined with the 61,000 accounted for by federal regulation that went into effect on Jan. 1, 2020, an estimated 143,000 more workers will be eligible for overtime pay by 2023.

Gov. Tom Wolf applauded the commission’s decision to approve the incremental phase-in of workers previously excluded from receiving overtime compensation.

Salary thresholds that trigger overtime pay will increase every year for the next three years. Starting in 2023, increases to the overtime salary threshold will kick-in every three years.

“Today’s approval of my plan will modernize our outdated overtime rules so more people are eligible for time-and-a-half pay,” Wolf said in an official statement. “This will put more money in the pockets of workers and strengthen the middle class.”

Changes to the state’s overtime requirements were approved in a split vote from IRRC commissioners Friday, indicating to leading business advocacy groups that an opportunity remains to counter the measure in 2020, and that public officials remain receptive to lobbying efforts.

“There is still some time to address this, either through litigation or through the general assembly,” said Gordon Denlinger, state director of the National Federation of Independent Business, in an interview following the announcement of the commission’s decision. “We’ll continue to push on this issue.”

Gene Barr, president and CEO of the Pennsylvania Chamber of Commerce and Industry, said the Wolf administration largely disregarded concerns raised by private sector stakeholders. Barr said business advocates and private companies “described unsustainable cost increases and harm to workplace morale” that will come as a result of companies having to transition from a guaranteed salary model to hourly clock-in wages.

“Unfortunately, the proposal approved today is only minimally different from the [Department of Labor and Industry’s] initial proposal and largely disregards the concerns raised by stakeholders,” Barr said. “We urge the General Assembly to consider the true impact of this proposal and for each legislative chamber to issue disapproval resolutions rejecting the change.”