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10/23/2019 11:44 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20190&cosponId=29135
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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: April 5, 2019 11:51 AM
From: Senator Lisa Baker
To: All Senate members
Subject: Creating Consistency Between Federal and State Wage and Hour Regulations
 
In the near future, I plan to reintroduce legislation to modernize and simplify the Pennsylvania Minimum Wage Act of 1968 (PMWA) by eliminating a long-standing problem for Pennsylvania employers – confusing and unnecessary differences between state and federal law regarding certain wage and hour requirements.

The federal Fair Labor Standards Act (FLSA) and the regulations promulgated under it have been revised numerous times over the years, providing extensive guidance to employers regarding wage and hour issues. Pennsylvania has not kept pace with these changes, causing employers to struggle with the compliance gap that exists between state and federal law.

For example, in 1968, the federal Department of Labor (DOL) published a comprehensive guide with respect to the application of certain overtime pay requirements under the FLSA. Among other provisions, the guide specifically approved a concept called the fluctuating work week. Likewise, the Pennsylvania Department of Labor & Industry (PA L&I) was of the opinion that, without regulations to the contrary, Pennsylvania employers were in fact entitled to utilize this concept. Unfortunately, however, this issue has perplexed both Pennsylvania courts and employers. In fact, Pennsylvania Courts have decided in the past that despite the federal guidance and despite the position of the PA L&I, the fluctuating work week concept was not permitted in the state. The issue was further confused in 2017 when the Pennsylvania Superior Court issued a fractured decision, with three judges utilizing differing and inconsistent rationale to arrive at three different conclusions. The case is now pending at the Pennsylvania Supreme Court.

My bill would bring stability and predictability to these issues by aligning the provisions of the PMWA with the FLSA. More specifically, it proposes that state law related to overtime would be interpreted in accordance with federal law, and the regulations and interpretations contained in the DOL’s Field Operations Handbook, while continuing to allow the state legislature to determine when a different approach should apply.

Pennsylvania would be joining 22 other states and the District of Columbia, which have already incorporated in full or in part the FLSA, or its implementing regulations, by reference into their statutes or regulations or by providing that state law does not apply to individuals covered by the FLSA. Additionally, this approach was advocated by numerous testifiers during a joint hearing of the Senate Appropriations Committee and the Senate Labor and Industry Committee held in 2016.

More recently, the Wolf Administration has acknowledged the benefit of consistency between federal and state law. In a June 2018 notice of proposed rulemaking, the PA L&I sought to amend a portion of its regulations with a laudable goal in mind: “the proposed amendments would align …[state law] with the federal regulations in effect since 2004” and make state law on this subject “consistent” with FLSA regulations. Unfortunately, the proposed regulations did not in fact accomplish this stated goal.

Last Session, this measure was introduced as SB 587 and was co-sponsored by Senators Martin, Gordner, Folmer, Rafferty and Mensch. The list of organizations in support of the bill includes the following:
  • Associated Builders and Contractors
  • Association of Independent Colleges and Universities of Pennsylvania
  • Hospital & Healthsystem Association of Pennsylvania
  • Insurance Agents & Brokers of Pennsylvania
  • LeadingAge PA
  • National Association of Social Workers-PA
  • National Federation of Independent Business-PA
  • Pennsylvania Advocacy and Resources for Autism and Intellectual Disability
  • Pennsylvania Association of Community Health Centers
  • Pennsylvania Bankers Association
  • Pennsylvania Builders Association
  • Pennsylvania Chamber of Business and Industry
  • Pennsylvania Council of General Contractors
  • Pennsylvania Credit Union Association
  • Pennsylvania Food Merchants Association
  • Pennsylvania Health Care Association
  • Pennsylvania Homecare Association
  • Pennsylvania Institute of Certified Public Accountants
  • Pennsylvania Manufacturers' Association
  • Pennsylvania Restaurant & Lodging Association
  • Pennsylvania Retailers Association
  • Pennsylvania School Boards Association
  • Pennsylvania State Association of Township Supervisors
  • Rehabilitation & Community Providers Association



Introduced as SB762