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PRINTER'S NO. 3013
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2536
Session of
2022
INTRODUCED BY ZABEL, D. WILLIAMS, KINSEY, McNEILL, HILL-EVANS,
HANBIDGE, SANCHEZ, SCHLOSSBERG, ISAACSON, FREEMAN, DELLOSO,
A. DAVIS, MALAGARI, WEBSTER, HOHENSTEIN, SAMUELSON, CIRESI,
DEASY, O'MARA, PISCIOTTANO, GUENST, HOWARD AND N. NELSON,
APRIL 22, 2022
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, APRIL 22, 2022
AN ACT
Amending the act of January 17, 1968 (P.L.11, No.5), entitled
"An act establishing a fixed minimum wage and overtime rates
for employes, with certain exceptions; providing for minimum
rates for learners and apprentices; creating a Minimum Wage
Advisory Board and defining its powers and duties; conferring
powers and imposing duties upon the Department of Labor and
Industry; imposing duties on employers; and providing
penalties," providing for executives, administrators and
professionals.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of January 17, 1968 (P.L.11, No.5), known
as The Minimum Wage Act of 1968, is amended by adding a section
to read:
Section 5.2. Executives, Administrators and Professionals.--
(a) (1) Employment in a bona fide executive capacity means
work by an individual:
(i) Whose primary duty is the management of the enterprise
in which he is employed or of a customarily recognized
department or subdivision.
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(ii) Who customarily and regularly directs the work of two
or more other employes.
(iii) Who has the authority to hire or fire other employes
or whose suggestions and recommendations as to the hiring,
firing, advancement, promotion or any other change of status of
other employes are given particular weight.
(iv) Who is compensated for services on a salary basis at a
rate:
(A) Of not less than six hundred eighty-four dollars ($684)
per week exclusive of board, lodging or other facilities,
effective October 3, 2020.
(B) Of not less than seven hundred eighty dollars ($780) per
week exclusive of board, lodging or other facilities, effective
October 3, 2021.
(C) Of not less than eight hundred seventy-five dollars
($875) per week exclusive of board, lodging or other facilities,
effective October 3, 2022.
(D) Effective October 3, 2023, and each third year
thereafter, equal to the weighted average tenth percentile wages
for Commonwealth workers who work in exempt executive,
administrative or professional classifications per week as
determined by the department with advice and consultation by the
board and based on an annual wage survey of all worker
classifications conducted by the department.
(2) At least ninety days prior to the effective date of the
adjusted weekly salary rate for each three-year period under
paragraph (1)(iv)(D), the department shall submit to the board,
the adjusted weekly salary rate determined under paragraph (1)
(iv)(D) and the information supporting the adjusted weekly
salary rate.
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(3) Upon review of the information submitted by the
department and at a meeting to be held no later than sixty days
before the effective date of the adjusted weekly salary rate for
each three-year period, the board may provide advice and
consultation to the secretary regarding the adjusted weekly
salary rate.
(4) At least thirty days prior to the effective date of the
adjusted weekly salary rate for each three-year period, the
department shall transmit notice of the adjusted weekly salary
rate to the Legislative Reference Bureau for publication in the
Pennsylvania Bulletin and post the adjusted weekly salary rate
on the department's publicly accessible Internet website.
(5) Up to ten percent of the salary amount required under
paragraph (1)(iv) may be satisfied by the payment of
nondiscretionary bonuses, incentives and commissions that are
paid annually or more frequently. The employer may use any
fifty-two-week period as the year. If the employer does not
identify some other year period in advance, the calendar year
will apply. If by the last pay period of the year the sum of the
employe's weekly salary plus nondiscretionary bonus, incentive
and commission payments received does not equal fifty-two times
the weekly salary amount required under this section, the
employer may make one final payment sufficient to achieve the
required level no later than the next pay period after the end
of the year. A final payment made after the end of the year may
count only toward the prior year's salary amount and not toward
the salary amount in the year it was paid.
(b) (1) Employment in a bona fide administrative capacity
means work by an individual:
(i) Whose primary duty is the performance of office or
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nonmanual work directly related to management or general
business operations of the employer or the customers of the
employer.
(ii) Whose primary duty includes the exercise of discretion
and independent judgment with respect to matters of
significance.
(iii) Who is compensated for services on a salary basis at a
rate:
(A) Of not less than six hundred eighty-four dollars ($684)
per week exclusive of board, lodging or other facilities,
effective October 3, 2020.
(B) Of not less than seven hundred eighty dollars ($780) per
week exclusive of board, lodging or other facilities, effective
October 3, 2021.
(C) Of not less than eight hundred seventy-five dollars
($875) per week exclusive of board, lodging or other facilities,
effective October 3, 2022.
(D) Effective October 3, 2023, and each third year
thereafter, equal to the weighted average tenth percentile wages
for Commonwealth workers who work in exempt executive,
administrative or professional classifications as determined by
the department with advice and consultation by the board and
based on an annual wage survey of all worker classifications
conducted by the department.
(2) At least ninety days prior to the effective date of each
three-year period under paragraph (1)(iii)(D), the department
shall submit to the board, the adjusted weekly salary rate
determined under paragraph (1)(iii)(D) and the information
supporting the adjusted weekly salary rate.
(3) Upon review of the information submitted by the
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department and a meeting to be held no later than sixty days
before the effective date of the adjusted weekly salary rate
determined under paragraph (1)(iii)(D), the board may provide
advice and consultation to the secretary regarding the adjusted
weekly salary rate.
(4) At least thirty days prior to the effective date of the
adjusted weekly salary rate for each three-year period, the
department shall transmit notice of the adjusted weekly salary
rate to the Legislative Reference Bureau for publication in the
Pennsylvania Bulletin and post the rate on the department's
publicly accessible Internet website.
(5) Up to ten percent of the salary amount required under
paragraph (1)(iii) may be satisfied by the payment of
nondiscretionary bonuses, incentives and commissions that are
paid yearly or more frequently. The employer may use any fifty-
two-week period as the year. If the employer does not identify
some other year period in advance, the calendar year shall
apply. If by the last pay period of the year the sum of the
employe's weekly salary plus nondiscretionary bonus, incentive
and commission payments received does not equal fifty-two times
the weekly salary amount required by this section, the employer
may make one final payment sufficient to achieve the required
level no later than the next pay period after the end of the
year. A final payment made after the end of the year may count
only toward the prior year's salary amount and not toward the
salary amount in the year it was paid.
(c) (1) Employment in a bona fide professional capacity
means work by an individual:
(i) Whose primary duty is the performance of work requiring
either of the following:
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(A) knowledge of an advanced type in a field of science or
learning customarily acquired by a prolonged course of
specialized instruction and study; and
(B) invention, imagination, originality or talent in a
recognized field of artistic or creative endeavor.
(ii) Who is compensated for services on a salary or fee
basis at a rate:
(A) Of not less than six hundred eighty-four dollars ($684)
per week exclusive of board, lodging or other facilities,
effective October 3, 2020.
(B) Of not less than seven hundred eighty dollars ($780) per
week exclusive of board, lodging or other facilities, effective
October 3, 2021.
(C) Of not less than eight hundred seventy-five dollars
($875) per week exclusive of board, lodging or other facilities,
effective October 3, 2022.
(D) Effective October 3, 2023, and each third year
thereafter, equal to the weighted average tenth percentile wages
for Commonwealth workers who work in exempt executive,
administrative or professional classifications as determined by
the department with advice and consultation by the board and
based on an annual wage survey of all worker classifications
conducted by the department.
(2) At least ninety days prior to the effective date of the
adjusted weekly salary rate for each three-year period under
paragraph (1)(ii)(D), the department shall submit to the board,
the adjusted weekly salary rate under paragraph (1)(ii)(D) and
the information supporting the adjusted weekly salary rate.
(3) Upon review of the information submitted by the
department and a meeting to be held no later than sixty days
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before the effective date of the adjusted weekly salary rate
determined under paragraph (1)(ii)(D), the board may provide
advice and consultation to the secretary regarding the adjusted
weekly salary rate.
(4) At least thirty days prior to the effective date of the
adjusted weekly salary rate for each three-year period, the
department shall transmit notice of the adjusted weekly salary
rate to the Legislative Reference Bureau for publication in the
Pennsylvania Bulletin and post the rate on the department's
publicly accessible Internet website.
(5) Up to ten percent of the salary required under paragraph
(1)(ii) may be satisfied by the payment of nondiscretionary
bonuses, incentives and commissions that are paid yearly or more
frequently. The employer may use any fifty-two-week period as
the year, such as a calendar year, fiscal year or anniversary of
hire year. If the employer does not identify some other year
period in advance, the calendar year will apply. If by the last
pay period of the year the sum of the employe's weekly salary
plus nondiscretionary bonus, incentive and commission payments
received does not equal fifty-two times the weekly salary amount
required by this section, the employer may make one final
payment sufficient to achieve the required level no later than
the next pay period after the end of the year. A final payment
made after the end of the year may count only toward the prior
year's salary amount and not toward the salary amount in the
year it was paid.
(d) As used in this section:
"Directly related to management or general business
operations" includes, but is not limited to, work in functional
areas, including, but not limited to:
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(1) Finance.
(2) Accounting.
(3) Budgeting.
(4) Auditing.
(5) Insurance.
(6) Quality control.
(7) Purchasing.
(8) Procurement.
(9) Advertising.
(10) Marketing.
(11) Research.
(12) Safety and health.
(13) Personnel management.
(14) Human resources.
(15) Employe benefits.
(16) Labor relations.
(17) Public relations and government relations.
(18) Computer network, Internet and database administration;
and
(19) Legal and regulatory compliance.
"Management" shall include, but not be limited to:
(1) activities such as interviewing, selecting and training
of employes;
(2) setting and adjusting employes' rates of pay and hours
of work;
(3) directing the work of employes;
(4) maintaining production or sales records for use in
supervision or control;
(5) appraising employes' productivity and efficiency for the
purpose of recommending promotions or other changes in status;
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(6) handling employe complaints and grievances;
(7) disciplining employes;
(8) planning the work;
(9) determining the techniques to be used to perform work;
(10) apportioning the work among the employes;
(11) determining the type of materials, supplies, machinery,
equipment or tools to be used or merchandise to be bought,
stocked and sold;
(12) controlling the flow and distribution of materials or
merchandise and supplies;
(13) providing for the safety and security of the employes
or the property;
(14) planning and controlling the budget; and
(15) monitoring or implementing legal compliance measures.
Section 2. This act shall take effect immediately.
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