minimum salary

Let's Talk About The Proposed Overtime Rule

I need to tell you about something I learned recently that completely shocked me and affects every single one of us. I went to an event last week called “A Guide to Pennsylvania's Proposed Overtime Rule” to learn about new laws surrounding worker overtime pay that are being introduced in the state of Pennsylvania and I quickly discovered that the laws designed to protect employees’ salaries which should be common knowledge are unknown to most of us. If you live in a state other than Pennsylvania, I encourage you to look into the laws surrounding overtime pay because the rules may surprise you.

In Pennsylvania, the current laws on overtime pay have not been updated since the 1970s. These current overtime laws state that if you work in Pennsylvania and make just $250 a week or $13,000 annually, your employer does not have to pay you overtime. I don’t know about you, but I could not believe what I heard when the event speakers said this. In 1970s, a minimum annual salary of $13,000 may have been enough to live off of, but it is 2018. Fifty years have gone by, the cost of living has continued to rise but the minimum salary has not and employees are suffering.

In response, Governor Tom Wolf proposed a new law this June to update these overtime rules to raise the minimum salary requirement. Beginning in 2019, Wolf is proposing to change the minimum requirements to $610 a week or approximately $31,000 annually. So, if you make more than $31,000 a year your employer can ask you to work as much as they want without paying overtime and if you make less than $31,000 you’ll have to track your hours and employers will need to pay you overtime if you work more than you were hired to work. The proposed law would continue to increase the minimum salary requirement over a few more years. In 2020, the minimum would increase to $39,000 per year and then to $47,000 annually in 2021.

An increase in the minimum salary sounds like a great thing to me and employees everywhere, but there’s a reason why it hasn’t happened yet. It turns out that the Federal Government recently tried to raise the minimum salary requirement. However, a lawsuit was filed against this change and the government lost. Companies were able to continue working their employees to death and all they have to pay them is $13,000 a year. That is absolutely crazy to me.

What was really shocking to me about all of this, however, was the reaction I saw in the event venue. While I was excited to learn that there was a new law designed to raise the minimum salary for workers, I was the outlier in the room. A majority of the people in the room were completely outraged and disgusted by it. Most of the attendees were employers with bigger companies. For employers with a lot of employees, paying for overtime for each employee is expensive. These employers don't want to have to worry about paying for overtime because it's a large cost to their business. In all of their outrage, I was surprised that it seemed like not many of the people in the room were thinking about what living off of $13,000 a year really feels like today. You cannot survive off of $13,000 a year in today’s world, plain and simple.

An increase in the minimum salary requirement does come with side effects. Some people at this event did point out that this change may make some employees feel like they are being demoted because their employers might need them to start tracking their hours to ensure they are not working too much. You might also be an employee that likes to go the extra mile for your company by working extra hours and this law may prompt your employer to prevent you from doing that. I understand these concerns, yet I think this may be a blessing in disguise. A lot of us are at home checking work emails at all hours of the day and getting underpaid for that extra work. Teachers especially are working on lesson plans and grading papers 24/7 with no law guaranteeing them overtime pay. This law could really help work-life balance by making employers think twice about overworking their employees and help employees feel empowered to make smarter choices about how much they want to work. However, the one side effect that concerns me is that employers may choose to lay off lower level employees in order to avoid overtime pay.

Even with potential side effects, the fact is that you deserve to get paid better for putting in extra work. If you live in Pennsylvania and feel strongly about this law, the good news is that you can still provide your feedback to the state government before this law is finalized. Whether you are in support of the proposed plan or have other input to give, I encourage you to get involved in this issue because it is so important to so many people. For those that live in other states, I also encourage you to look into what laws are affecting your pay as there might be something you can do to change them. I personally am excited that Pennsylvania is moving forward in the right direction towards more fair pay. Day in and day out, I meet incredibly talented people that are overworked and underpaid. They deserve to work for a salary that reflects their value.

If you feel like you are overworking yourself at a job that leaves you feeling unfulfilled and empty, grab a ticket to attend my talk on “How to Find Work That Fills Your Wallet AND Your Soul” this Friday at 12PM. The tools I share on Friday will bring you one step closer to leaving a job that doesn’t speak to your true value and to finding the work you love!