Eight and Eighty Work Week Signed Into Law
September 13, 2012
On July 5, 2012, Governor Corbett signed into law Act 109, which amends provisions of the Pennsylvania Minimum Wage Act (“PMWA”). One amendment permits employers to calculate overtime using a 14 day, 80 hour work week, instead of using a 40 hour work week. Another amendment in Act 109 provides an overtime exemption for air carrier employees who work more than 40 hours in a work week when trading scheduled work hours with another employee.
Under the federal Fair Labor Standards Act (“FLSA”), employees who work more than 40 hours in a seven day work week must be paid overtime at time and one-half their regular rate of pay. However, the FLSA has an “8 and 80” exception to this rule for individuals employed in hospitals and certain residential establishments which provide health care. Under this exception, eligible employers can calculate overtime by paying employees time and one-half their regular rate for all hours worked over 8 in a work day and 80 hours in a 14 day period. The 8 and 80 rule is advantageous to employers because they can avoid paying as much overtime as they might under a regular 40 hour per work week overtime requirement. For example, if an employee works six eight hour days in a seven day work week, she would be entitled to 8 hours overtime. Under the 8 and 80 rule, however, she would not receive any overtime.
Until recently, it was unclear whether the 8 and 80 rule applied to employers in Pennsylvania, since Pennsylvania has its own overtime laws. In the case of Turner v. Mercy Health System, a Philadelphia court ruled that the 8 and 80 rule could not be used by Pennsylvania employers because the exception was not contained in the PMWA. Thus, many hospitals worried that they could not schedule employees as they had been prior to the Turner case.
Act 109 was enacted to essentially overrule the Turner case and make clear that the 8 and 80 rule applies in Pennsylvania. The amendment specifically incorporates the relevant section of the FLSA into the PMWA. Going forward, then, employees will only be entitled to overtime if they work more than 8 hours in a day, or more than 80 hours in a 14 day period.
It is noteworthy that the 8 and 80 exception is only permitted if the employer has an agreement with the affected employees, or their union, before the work is performed.
Another amendment in Act 109 provides an overtime exemption for air carrier employees who work in more than 40 hours in a workweek as a result of a voluntary agreement among employees to trade hours, or air carrier employees who have collective bargaining agreements that cover the required hours of work and compensation. Again, it is noteworthy that these arrangements must be pursuant to an agreement between the employer and the employees or their union.
As always, should you have questions about the application of these detailed and complicated rules, feel free to contact the attorneys at Willig, Williams & Davidson.