HARRISBURG — Pennsylvania’s new overtime rule has taken effect.

The Pennsylvania Department of Labor and Industry updates the Minimum Wage Act’s regulations to expand eligibility for overtime and strengthen protections for Pennsylvanians. The final rule updates the salary threshold to reflect current wages paid to Pennsylvanians working in executive, administrative, and professional occupations. It also ensures that the duties tests for executive, administrative and professional workers more closely align to those in the Fair Labor Standards Act’s federal overtime regulations.

The Fair Labor Standards Act regulations update that took effect on Jan. 1, 2020, raised the federal overtime salary threshold to $35,568. While Pennsylvania’s overtime rule aligns more closely with the Fair Labor Standards Act, the state Labor and Industry Department has set the minimum salary threshold at $45,500 and the increase will be phased in three steps:

¯ $684 per week, $35,568 annually (per federal rule), on January 1, 2020;

¯ $780 per week, $40,560 annually on October 3, 2021; and

¯ $875 per week, $45,500 annually on October 3, 2022.

Starting in 2023, the salary threshold will adjust automatically every three years.

Pennsylvania’s new overtime rules also allow up to 10% of the salary threshold to be satisfied by nondiscretionary bonuses, incentives and commissions that are paid annually, quarterly or more frequently.

With a few exceptions, all hourly employees who work more than 40 hours per week are eligible for overtime. Most salaried employees who work more than 40 hours per week and earn less than the salary threshold regardless of their job duties are also eligible for overtime, while most salaried employees who do not perform executive, administrative, or professional duties, regardless of how much they are paid, are eligible for overtime.

Salaried employees who perform executive, administrative, or professional duties and make more than the salary threshold per year are not eligible for overtime, nor are other occupations exempted by the Minimum Wage Act.

The Pennsylvania Minimum Wage Act Exemption requires employers to pay their employees at a rate of not less than $7.25 an hour for all hours worked and an overtime rate of 1.5 times the employee’s regular rate of pay for all hours worked above 40 in a workweek.

The Minimum Wage Act provides an exemption from both minimum wage and overtime pay for employees employed in a bona fide executive, administrative, or professional capacity. To qualify for the exemption, employees must meet certain tests regarding their salary and their job duties.