Pennsylvania: Final Rule Increase Salary Exempt Threshold Repealed

Last year, the Pennsylvania Department of Labor and Industry (DLI) published a final rule that was set to increase the salary threshold for the executive, administrative, and professional (EAP) exemption. The rule gradually increased the threshold on October 3rd of each year, with the first increase taking effect last year on October 3, 2020.

HB 336 not only repeals the salary exemption increase and restores it to its pre-2020 threshold, it also repeals the regulatory framework that defined the EAP exemption under the Pennsylvania Minimum Wage Act (PMWA). Effective September 7, 2021, the provisions regulating the definition of the executive, administrative, or professional exempt employee status will be repealed in their entirety. However, the EAP exemption itself still exists under the PMWA statute. The question then becomes “what are the criteria to qualify for the EAP exemption?”

Pennsylvania courts typically consider the federal authority that exists at the time of a state law enactment. With this change, courts may potentially interpret the PMWA’s EAP exemption by referring to the federal FLSA EAP exemptions existing when the PMWA was first enacted in 1968. However, given that the FLSA EAP exemptions have been revised in the years since, Pennsylvania employers may need to consider the EAP exemption with both historical and contemporary FLSA regulations in mind.

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