UPDATE: On July 5, 2012, the Governor signed the 8/80 bill (HB 1820). While the Legislature’s action was certainly welcome news for Pennsylvania employers who had been using the 8/80 method, the amendment is prospective only, so employers may continue to face litigation over this issue for prior use of the 8/80 method. Also, this incident stands as a stark reminder to all Pennsylvania employers that wage and hour compliance is not just a federal issue. Where Pennsylvania law differs from the FLSA (and there are many such differences, even now that the 8/80 issue has been reconciled), employers must be aware of their obligations under both federal and state law.
In what would bring an end to a recent rash of class actions aimed at healthcare employers, the Pennsylvania Legislature presented Governor Corbett with a bill on June 28 that would amend the Pennsylvania Minimum Wage Act (PMWA) to specifically allow healthcare employers to pay employees overtime on a 14-day workweek, as opposed to a 40-hour workweek. The amendment would bring the PMWA into compliance with a provision of the Fair Labor Standards Act (FLSA) that permits medical facilities to pay employees overtime for hours worked in excess of 8 hours per day or 80 hours in a 14-day period. This is an exception to the Pennsylvania rule that requires all hours worked in excess of 40 in a seven-day workweek to be paid as overtime. Many healthcare employers had relied on the FLSA to use this manner of paying their employers until a decision in the Common Pleas Court of Philadelphia determined that this method of calculating overtime was not lawful. As a result of that decision, lawsuits were filed against numerous healthcare employers seeking damages for the use of this overtime payment method.
If signed by the governor, this amendment will be welcome news for many healthcare employers who found the 8/80 method much easier to administer due to scheduling issues unique to the healthcare industry. To utilize the 8/80 method for calculating overtime, healthcare employers must first negotiate any such change with the unions of any represented employees and provide advance notice to their employees of the intent to adopt this method of pay. The bill will become effective immediately upon Governor Corbett’s signature. Healthcare employers that use or have used the 8/80 overtime method for calculating overtime will be able to again take advantage of the benefits such an amendment would provide.