Salaried employees are individuals who receive a predetermined fixed amount of compensation at regular intervals, which can be weekly or less frequently.
The purpose of this article is to give an overview of the relevant laws and regulations that govern the rights and responsibilities of both salaried employees and their employers in Pennsylvania. It will address various subjects, including payment, break and leave benefits, and the differentiation between exempt and non-exempt employees.
This article covers:
- Payment of Wages for Salaried Employees in Pennsylvania
- Salaried Employees Eligibility for Overtime for Pennsylvania
- Pay for Working Overtime for Pennsylvania Salaried Employees
- Overtime Exemptions for Pennsylvania Salaried Employees
- Unpaid Wages for Salaried Employees in Pennsylvania
- Male and Female Salaried Employees in Pennsylvania
- Leave Entitlements for Salaried Employees in Pennsylvania
- Break Entitlements for Salaried Employees in Pennsylvania
- Deductions from Exempt Employees’ Salary in Pennsylvania
- Termination of Employment for Salaried Employees in Pennsylvania
In Pennsylvania, employers have flexibility in determining how often they pay their workers, depending on the job type and existing contracts. However, all employers must establish a regular payday based on the pay period’s length.
The pay period cannot exceed one of the following options: a time period specified in an agreement between the employer and employee, a customary time frame standard in the employer’s business sector, or a maximum of 15 days if neither of the previous options applies.
The majority of salaried employees who work over 40 hours per week and earn below the federal salary threshold qualify for overtime pay, regardless of their job responsibilities. Similarly, most salaried employees who do NOT perform executive, administrative, or professional tasks are eligible for overtime, irrespective of their earnings.
On the other hand, salaried employees engaged in executive, administrative, or professional duties and earning above the salary threshold are exempt from receiving overtime pay.
The federal regulations related to exempting such employees from overtime rules are still in place. The current salary threshold is $684 per week (equivalent to $35,568 annually) as per the United States Department of Labor (USDOL).
To determine overtime for salaried employees, employers must first calculate the employee’s regular rate. The regular rate for non-exempt salaried employees is determined by dividing all remuneration paid to the employee by 40 hours.
For example, for an employee who earns $1,000 per week. To calculate the regular rate, divide the weekly salary by a standard 40-hour workweek:
(Weekly remuneration) / (40 Hours) = Regular rate
($1,000 ÷ 40) = $25.00.
If the employee worked 50 hours in a week, they are entitled to 10 hours of overtime. So, to determine overtime pay, multiply the regular rate by the number of overtime hours worked and then multiplying that amount by one time and one-half (1.5):
(Regular rate) x (Overtime hours) x (1.5) = Overtime pay
$25 x 10 x 1.5 = $375 overtime pay.
Add the weekly salary to the overtime pay:
$1,000 + $375 = $1,375.
The employee is owed $1,375 for that week of pay, which includes their $1,000 weekly salary and an additional $375 in overtime pay for the ten hours of overtime they worked.
Even though it might appear challenging, employees have multiple methods at their disposal to establish overtime rates for their workers and ensure compliance with overtime regulations. Employees can make use of time clock software, employ a work hours tracker, or utilize various time tracking techniques to maintain accuracy in hours for these calculations.
As mentioned above, Pennsylvania’s labor laws mandate overtime pay for most employees who exceed 40 hours of work in a week, but exempt certain occupations from these regulations. Examples of exempt occupations include:
- Executive, administrative, and professional employees earning above a specified weekly amount
- Farm workers engaged in crop production, animal husbandry, or related activities
- Sailors employed on vessels or boats, salesmen, partsmen, or mechanics primarily dealing with vehicles like cars or trucks
- Taxi drivers operating passenger vehicles
- Motion picture theater workers
- Workers in cities or towns with a population of 100,000 or less, provided they are not part of a larger metropolitan statistical area exceeding 100,000 in total population
- Employees living in cities or towns with a population of 25,000 or less if they are located within a standard metropolitan statistical area, but at least 40 miles away by air from the main city in that area
Learn more in detail about Pennsylvania Overtime Laws.
The Wage Payment and Collection Law (Act No. 329 of July 14, 1961) extends its protection to all male and female employees, as well as minors, who are employed by an employer within the state of Pennsylvania.
If the employer does not pay or provide a satisfactory explanation to the Secretary of Labor and Industry within 10 days of receiving notification of a bona fide wage claim, they will be subject to a penalty of 10 percent of the wage claim. Furthermore, in addition to being liable for unpaid wages, fringe benefits, wage supplements, and liquidated damages, an employer who knowingly violates any provision of this Law will face further consequences.
The Pennsylvania Equal Pay Law, 43 P.S. §336 (EPL), prohibits employers from paying different wages to employees of the opposite sex for equal work that involves comparable skill, effort, and responsibility, under similar working conditions. Exceptions exist for pay based on seniority, merit, and performance-based systems.
If an employer is found to be paying wages in violation of the Pennsylvania Equal Pay Law, they cannot reduce the employee’s wage rate to comply. Any agreement between the employer and employee to accept lower wages than entitled under this law is not considered a defense. Employers are also obligated to maintain records of wages and other employment terms that can substantiate that the law has been violated.
Claims under the Equal Pay Law follow a two-step burden-shifting test. The employee must first establish a prima facie case showing that opposite-sex employees were paid differently for substantially equal work. If this is proven, the burden shifts to the employer to demonstrate one of the affirmative defenses applies.
A willful and knowing violation of the Pennsylvania Equal Pay Law makes the employer liable to affected employees for unpaid wages and an equal amount as liquidated damages. Employees, either individually or as a group, can file a lawsuit to recover wages, damages, and reasonable attorneys’ fees and costs. The action must be filed within two years from the date of the violation.
In Pennsylvania, salaried employees have access to several types of leave. The federal Family and Medical Leave Act allows eligible employees to take up to 12 weeks of unpaid leave for medical emergencies, including caring for a newborn, adopting a child, or tending to a family member’s health condition.
Jury service leave is granted to all employees, and employers cannot penalize them for fulfilling this civic duty, although payment during this time off is not mandatory. Under the federal Uniformed Services Employment and Reemployment Rights Act (USERRA), employees in the uniformed services are entitled to unpaid military leave, maintaining benefits and seniority upon their return.
Additionally, Pennsylvania state employees receive sick leave, bereavement leave, and paid vacation and holiday leave based on their years of service.
In Pennsylvania, there is no legal requirement, either at the state or federal level, for employers to provide meal or rest breaks to their workers. However, many employers voluntarily offer these breaks to their employees.
If an employer chooses to provide breaks, there are specific rules to follow. Rest breaks of 20 minutes or less must be paid and considered as part of the employee’s work hours. During these breaks, employees can rest, eat, or attend to personal matters. On the other hand, meal periods must be longer than 20 minutes and can be unpaid, but the employee must be relieved of all work duties during this time.
There is a special provision for minor employees aged 14 through 17, who are entitled to a minimum 30-minute break if they work for 5 or more consecutive hours.
The Commonwealth of Pennsylvania is obliged to follow the federal Fair Labor Standards Act (FLSA) and the regulations set forth by the U.S. Department of Labor concerning salary basis pay for exempt employees. Being paid on a “salary basis” means that an employee consistently receives a fixed amount of compensation per pay period, which cannot be reduced based on the quality or quantity of their work.
With certain exceptions, exempt employees must receive their full salary for any workweek in which they perform any work, regardless of the number of days or hours worked in that week. As a result, the Commonwealth of Pennsylvania prohibits any unauthorized deductions from the salary of these exempt employees. If there are questions regarding an employee’s exemption status, they should be directed to the employee’s office of human resources.
Nonetheless, exceptions to this exist. Exempt, salaried employees in Pennsylvania may have deductions from their salary under the following circumstances:
- If an exempt employee is absent for personal reasons without available paid leave, their salary will be reduced for each hour (or fraction of an hour) they are absent.
- When an exempt employee is absent due to sickness or disability, their compensation will follow the state’s sick leave, disability, or workers’ compensation policies. If no leave is available, their salary will be reduced for each hour (or fraction of an hour) they are absent due to illness.
- During an exempt employee’s first and last weeks of employment, they will only be paid for the days actually worked.
- If an exempt employee takes unpaid leave under the Family and Medical Leave Act (FMLA), their salary will be reduced for each hour (or fraction of an hour) of unpaid leave taken.
- If an exempt employee is suspended for violating safety rules, their salary will be reduced for each hour (or fraction of an hour) of the suspension.
- When an exempt employee is suspended for one or more full days due to violating workplace conduct rules, their salary will be reduced for each day of the suspension. Workplace conduct rules exclude issues related to job performance or attendance.
Although salaried employees are not usually required to monitor their attendance, ensuring employees’ rights when it comes to deductions are situations where time and attendance tracking can be advantageous.
Pennsylvania follows the principle of “Employment At-will” regarding the termination of employment. This means that both the employer and the employee have the right to terminate the employment relationship at any time and for any reason.
This rule applies to private business employees, unless there is a specific provision in their employment contract stating otherwise.
In Pennsylvania, employers are required to provide their employees with their final paychecks on or before the next regularly scheduled payday, regardless of whether the employee resigned or was terminated.
Learn more about Pennsylvania Labor Laws through our detailed guide.
Important Cautionary Note
When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for use of this guide.