A new federal rule backed by the U.S. Department of Labor went into effect Jan. 1. The provision to the Fair Labor Standards Act (FLSA) raised the threshold for salaried employees to be eligible for overtime pay to $455 per week to $684.
At the moment, the majority of businesses and nonprofit organization in the county are unaffected.
Jake Maijala, the chief human resources officer at Penn Highlands Huntingdon, said the organization hasn’t had to make any changes.
“Across Penn Highlands Healthcare, including at Penn Highlands Huntingdon, we conduct periodic reviews of pay ranges compared to market and we already meet or exceed the requirements outlined in the new state employment law and the updated Federal Labor Standards Act (FLSA) rules.”
Similarly, Huntingdon House, a nonprofit social services organization in Huntingdon that supports victims of domestic violence, is unaffected for now.
For now we don’t have to do anything,” said Jean Collins, the organization’s executive director.
However, Pennsylvania Gov. Tom Wolf, along with the Department of Labor & Industry (L&I), is seeking to amend the Minimum Wage Act of 1968, and has submitted regulation to the Independent Regulatory Review Commission (IRRC) to raise the state’s threshold for overtime exemption over the next two years.
If approved by the IRRC Jan. 31, the threshold for exemption would be raised to $780 per week, $40,560 annually in 2021 and $875 per week, $45,500 annually in 2022, giving overtime eligibility to approximately 143,000 state workers.
If that happens, that would change the situation for many businesses and nonprofits.
“If the new state regulation happens we would have to do an increase over the next few years,” said Collins. “We haven’t made a final decision but that’s the direction we’re heading. Several of our salary workers do work overtime and we absolutely can’t do that. I want to be fair paying people. It is a cost burden but it’s work that should be fairly compensated at the same time.”
Tory Smith, the assistant executive director for direct services at Huntingdon House, is one of those salaried employees currently exempt from overtime pay under the federal law, though that would change if the new regulation is passed.
“It’s not all the time, but there are weeks where I work significant overtime,” he said.
Kathy Armillei, executive director of Huntingdon County United Way, works with a wide range of nonprofits in the county and thinks they may struggle with the new overtime rules as many of their employees are salaried and work more than 40 hours per week.
“I think it would be detrimental to them,” she said. “I know some people who are paid on a salary basis and put in a lot more time than 40 hours a week. They might only be required to work 30 hours a week but that’s not how it goes, they’re working 45 or 50. I feel it could really hurt some nonprofits. I think it will affect some nonprofits, not all.”
Armillei wonders how the government is going to monitor nonprofits to make sure they are fairly compensating employees and worries there is still the potential for some employers to skirt the new rule.
“I’m concerned for those nonprofits that do have people at that level that really should be paying them. How is the government going to monitor this rule to ensure it is being enforced? I know people I’m sure who weren’t at the overtime threshold and the organization was still getting away (working overtime without pay) based on their job description. I have told some of those people in that position that is not correct,” she said.
Nathan can be reached at email@example.com.