Compliance Watch:

What are my rights as an hourly employee in Pennsylvania?

Hourly employees receive an hourly wage for the services they perform which contrasts with their salaried counterparts, who earn a fixed income despite the working hours they put in.

Typically, hourly employees have their schedules determined by their employer and their working hours tracked by a timesheet or time card to verify their working hours for payroll purposes.

As hourly employees are paid by the hour and may have a varying work schedule depending on their employer’s decision, this means that their stream of income may differ from week to week unlike salaried employees who receive a steady pay.

Neither the federal Fair Labor Standards Act (FLSA) nor the Pennsylvania Minimum Wage Act (PMWA) dictate the maximum hours an employee above the age of 18 is scheduled to work in a week, including the number of hours they are allowed to work as overtime.

Both respective laws do, however, specify that hours worked beyond 40 hours in a workweek are considered as overtime whereby employers are compelled to pay employees 1.5 times their regular hourly minimum pay. Nevertheless, it is important to emphasize that overtime pay is inapplicable to employees of specific job categories and salary criteria.

In the state of Pennsylvania, both federal and state laws govern hourly standards and wages. While both laws extend different employment benefits, employers are obliged to adhere to both state and federal laws and are particularly obliged to follow the laws that confer the greatest benefits to employees. This requires employers to pay the highest minimum hourly wage that applies, whether it is determined by local, state, or federal rules. 

As it stands, the Pennsylvania Minimum Wage Act (PMWA) has set the current minimum hourly wage as $7.25 per hour in Pennsylvania, which aligns with the federal minimum wage set by the Fair Labor Standards Act (FLSA). Therefore, all of Pennsylvania’s hourly employees typically earn $290 in a 40-hour work week in accordance with the state’s minimum wage requirement.

The PMWA and the federal Fair Labor Standards Act (FLSA) mandates that employees working in certain occupations are exempt from earning minimum hourly pay and overtime pay set by the state. These exempt categories of employees comprise:

• Newspaper delivery men.
• Full-time students: High school and college students may earn 85% of the minimum hourly pay after acquiring a special Certificate from the Bureau of Labor Law Compliance.
• Tipped employees: Tipped employees are those who receive at least $135 worth of tips monthly. The Pennsylvania Minimum Wage Act (PMWA) has set a minimum hourly wage of $2.83 for tipped employees. If the employee’s total wage (inclusive of tips) does not amount to the minimum hourly wage rate of $7.25,  the employers must supplement that difference.
• Domestic workers.
• Farmers.
• Outside salesmen.
• Golf caddy.
• Administrative, executive, or professional employees are exempt when their weekly income surpasses $875.
• Computer professionals.
• Employees working in seasonal and recreational establishments.

As previously stated, both federal and state legislations define overtime as working more than 40 hours in a given work week, with the corresponding payment fixed at 1.5 times the regular rate of pay for each hour worked overtime. This sets the minimum overtime pay rate as $10.88 per hour for hourly employees in Pennsylvania.

With regards to an employee’s eligibility for overtime pay, the following categories of workers in Pennsylvania,  in addition to those stated earlier as exempt, are also classed as exempt from earning the minimum hourly overtime pay:

• Seamen.
• Certain salesmen, partsmen, and mechanics mainly involved in selling and servicing automobiles, trailers, trucks, farm implements, or aircraft.
• Taxicab drivers.
• Certain employees of federally regulated motor carriers.
• Employees involved in processing maple sap into sugar (other than refined sugar) or syrup.
• Employees working in a motion picture theatre.
• Announcers, news editors, and chief engineers of a radio or television station, depending on the particular city in which the major studio is based.
• Particular air carrier employees governed by Title II of the Railway Labor Act.

Similar to many other U.S. states, Pennsylvania employers are not legally compelled to provide meal and rest breaks to any of its employees under both federal and state regulations, unless such breaks have been agreed in an employment contract or a collective bargaining agreement. Instead, many companies voluntarily and generally offer work breaks in order to retain employees’ efficiency levels and enhance morale.

If companies decide to offer work breaks, federal regulations require employers to compensate employees for rest breaks that are 20 minutes long. On the other hand, meal breaks lasting more than 20 minutes remain unpaid for, provided that the break is primarily used for eating and the employee is disengaged from any work duties.

However, an exception applies for minors aged 14 to 17 and seasonal farm workers in Pennsylvania. Employers are obligated to provide work breaks for these types of employees. According to the law, work breaks must be granted for every 5 hours of work, with a minimum time of 30 minutes for both minor employees and seasonal farmworkers.

Employees who are nursing mothers are also another exception. In Pennsylvania, the Fair Labor Standards Act (FLSA) requires employers to give reasonable breaks  for lactating mothers to pump milk. These breaks must take place in a private, non-bathroom area that is free from intrusion of coworkers and the public, for up to one year after child birth.

• Section 4563 Pennsylvania Consolidated Statutes: Section 4563 Pennsylvania Consolidated Statutes provides that an employer is prohibited from discharging, threatening or depriving an employee from their seniority position due to their fulfilment of jury duty obligations.
• Section 4957 Pennsylvania Consolidated Statutes: Section 4957 Pennsylvania Consolidated Statutes prohibits employers from retaliating against their employee for attending court as a witness or victim to a crime. Hence, employers are mandated to provide employees with unpaid leave to attend court for these reasons.
• The Family and Medical Leave Act of 1993: The Family and Medical Leave Act grants eligible workers with 12 weeks of unpaid leave every year for qualifying family or serious health reasons, with the right to return to employment. However, employees only qualify for this leave if: 
  • They have worked for the same employer for at least 12 months before utilizing the leave.
  • They have worked for at least 1,250 hours within those 12 months of employment under the same employer.
  • They are employed by an employer with a minimum of 50 employees within a 75-mile radius.

In order to understand the applicability of pay deduction laws for hourly employees in Pennsylvania, it is necessary to first grasp why such laws exist in the workforce and their overall impact on employees. 

Pay deductions laws are implemented to protect an employee from excessive and unjust deductions in their wage, ensuring that an employee’s remuneration remains fairly maintained. In Pennsylvania, such deductions in pay are meant for the benefit of the employee as mandated by state law.

Both the federal Fair Labor Standards Act (FLSA) and Pennsylvania’s Wage Payment and Collection Law primarily regulate wage deductions in Pennsylvania. The FLSA prohibits an employees’ wage to be deducted below the federal minimum hourly wage rate of $7.25 for overtime and regular work weeks. Under state law, employers are permitted to deduct their employee’s wage if it fulfils one of the following requirements below:

1. The deduction is required by state or federal law.
2. The deduction is made for labor organization dues, assessments and initiation fees, and other labor organization charges that are mandated by law.
3. The employee, in writing, has voluntarily authorized deductions for payments relating to:
   • Employee welfare and pension plans, including group insurance plans, hospitalization insurance, life insurance, and group hospitalization and medical service programs.
   • Company-operated thrift plans.
   • Stock option or stock purchase plans.
   • Charitable causes.
   • Employee personal savings account
   • Local area development initiatives.
   • Reimbursement of bona fide loans to the employer. 
   • The purchases or replacements by the employee of goods, services, etc., from the employer.
   • Purchases performed by the employee from external parties that are currently owned, affiliated, or under the control of the employer.

Furthermore, employers must keep up to date with every portion deducted from an employee’s wage. This is so that they can provide an accurate statement outlining all deductions with every paycheck to their employee, as mandated under section 231.36 of the Pennsylvania code.

The following is list of some of the many employment rights enjoyed by hourly employees in Pennsylvania:

• Minimum wage: Employers are legally required to provide their employees an hourly wage that meets the minimum state requirements, that being $7.25.
• Overtime: Pennsylvania employers are obliged to compensate their employees at a rate of 1.5 their regular hourly for working overtime hours beyond the regular 40 hour work week.
• Family and medical leave: The FMLA demands employers with more than 50 employees to grant their eligible employees with 12 weeks of unpaid leave for family or serious medical matters.
• Unemployment insurance: These benefits are given to employees who have been dismissed from their employment through no fault of their own. The purpose of unemployment insurance is to provide financial support to unemployed employees while they are in search of employment. These benefits are regulated by the State Department of Labor.
• Workers compensation: Under the Pennsylvania Workers’ Compensation Act, employers are obliged to provide ‘workers compensation’ and medical privileges for employees who have been afflicted with occupational injuries or illnesses during their duration of employment, irrespective of fault.
• Severance pay: Full time hourly employees may be entitled to receive severance pay upon the end of their employment. This pay is typically calculated based on the employee’s duration of service with their employer. Severance pay is typically paid as a lump sum, although it can be paid through other arrangements such as instalments.
• Other obligatory time-off provisions: Other mandatory leaves that employers are rightly entitled to include military leave, emergency response leave, sick leave, bereavement leave, vacation and holiday leave, voting leave.

1. Equal Pay: Under Pennsylvania law, All employees must be paid equal wages for working equal jobs that demand equal skill, effort, and responsibility regardless of their sex. Disparities in pay are only permitted if it is based on (1) a seniority system; (2) a merit system; (3) a system that measures income based on the production’s quantity or quality of production; or (4) any other factor other than sex.
2. Termination of employment: Employees are rightly entitled to be given their final paychecks by their employers upon ending their employment in a timely manner.
3. Child labor protection: State law provisions provided by The Child Labor Act seeks to protect employees below the age of 18 years in employment through a variety of ways, such as; regulating particular employment conditions, restricting work hours for certain age groups, requiring employment certificates to be obtained, prohibiting work in certain occupations.
4. Workplace discrimination: The state of Pennsylvania has established its own laws that prohibit discrimination in employment. Under the Pennsylvania Human Relations Act, employees are protected from having employment decisions that are based on their protected characteristics which include:  
   • Race
   • Color
   • Sex
   • Ancestry
   • National origin
   • Religion
   • Age
   • Disability
5. Personal Information Protection: All Pennsylvania employees with personal information stored online are entitled to have their personal data protected by their employers, as mandated by state law provisions. Personal information includes: 
   • The first name or first initial and last name of the employee.
   • Driver’s license number.
   • State identification card number.
   • Financial account number, credit or debit card number, in addition with any required security code, access code, or password that would grant access to an employee’s financial account.

With regards to termination of employment, Pennsylvania is one of the many employment-at-will states in the U.S. In other words, both the employer and employee are free to terminate the employment contract at any time without having to provide any justifications for doing so. Although, several exceptions apply to this general principle which serves to protect the employment rights of at-will employees. The exceptions include:

1. Employment contract: An employer must not terminate an employee if the grounds of termination violate the terms stipulated in the employment contract, as the contract legally binds all parties.
2. Public service: Employers are disallowed to terminate their employees who fulfil their public service obligations such as serving the military, participating in voting and serving their jury duty.
3. Retaliation: An employer cannot retaliate against the employee by terminating their employment if the employee decides to file a compensation claim or report illegal activities such as sexual harassment.
4. Workplace discrimination: Title VII of the Civil Rights Act of 1964 prohibits employers from wrongfully terminating an employee due to reasons related to their protected characteristics which include:
   • Race
   • Color
   • Sex
   • Ancestry
   • National origin
   • Religion
   • Age

Furthermore, if an employee voluntarily resigns from their job or has been terminated by their employer, Pennsylvania law mandates employers to issue the employee’s final paycheck on or before the next scheduled payday.

Severance pay is the compensation made to employees upon the termination of their employment and is typically calculated based on the tenure of their employment. In the state of Pennsylvania, both Pennsylvania laws and federal laws do not oblige employers to offer severance pay to their employees. Hence, severance pay is given only if it is required by the terms of the employment contract or company policies. This compensation can be paid as a one-time lump sum payment or be paid over several instalments.