An Act amending the act of January 17, 1968 (P.L.11, No.5), known as The Minimum Wage Act of 1968, providing for employment in executive capacity, for employment in administrative capacity and for employment in professional capacity.

PRINTER'S NO. 1103
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1023
Session of
2025
INTRODUCED BY NEILSON, HILL-EVANS, PIELLI, SANCHEZ, McNEILL,
GIRAL, GUENST, KHAN, HOHENSTEIN, McANDREW, PARKER, WARREN,
DELLOSO, BELLMON, CERRATO, GREEN AND MALAGARI, MARCH 24, 2025
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, MARCH 24, 2025
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 employment in executive capacity,
for employment in administrative capacity and for employment
in professional capacity.
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 sections
to read:
Section 3.1. Employment in Executive Capacity. -- (a) For
purposes of this act, "employment in a bona fide executive
capacity" means work by an individual:
(1) Whose primary duty is the management of the enterprise
in which the individuals are employed or of a customarily
recognized department or subdivision.
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The term "management" includes activities such as interviewing,
selecting and training of employees; setting and adjusting
employees' rates of pay and hours of work of employees;
directing the work of employees; maintaining production or sales
records for use in supervision or control; appraising employees'
productivity and efficiency for the purpose of recommending
promotions or other changes in status; handling employee
complaints and grievances; disciplining employees; planning the
work of employees; determining the techniques to be used to
perform work; apportioning the work among employees; determining
the type of materials, supplies, machinery, equipment or tools
to be used or merchandise to be bought, stocked and sold;
controlling the flow and distribution of materials or
merchandise and supplies; providing for the safety and security
of employees or the property; planning and controlling the
budget; and monitoring or implementing legal compliance
measures.
(2) Who customarily and regularly directs the work of two or
more other employees.
(3) Who has the authority to hire or fire other employees or
whose suggestions and recommendations as to the hiring, firing,
advancement, promotion or any other change of status of other
employees are given particular weight.
(4) Who is compensated for services on a salary basis at a
rate of not less than:
(i) Eight hundred forty-four dollars ($844) per week
exclusive of board, lodging or other facilities, effective
October 3, 2027.
(ii) Nine hundred eighty-six dollars ($986) per week
exclusive of board, lodging or other facilities, effective
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October 3, 2028.
(iii) One thousand one hundred twenty-eight dollars ($1,128)
per week exclusive of board, lodging or other facilities,
effective October 3, 2029.
(iv) Effective October 3, 2030, and each third year
thereafter, the weighted average 10th percentile wages for
Pennsylvania 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. The following procedure shall apply
under this paragraph:
(A) At least 90 days prior to the effective date of each
three-year period in this subparagraph, the department shall
submit to the board the adjusted weekly salary rate under this
subparagraph and the information supporting the adjusted salary
rate.
(B) Upon review of the information submitted by the
department and at a meeting to be held no later than 60 days
before the effective date of the adjusted weekly salary rate,
the board may provide advice and consultation to the secretary
regarding the adjusted weekly salary rate.
(C) At least 30 days prior to the effective date of each
three-year period in this subparagraph, the department shall
publish the adjusted weekly salary rate on the department's
publicly accessible Internet website and shall transmit notice
of the annual wage survey report to the Legislative Reference
Bureau for publication in the next available issue of the
Pennsylvania Bulletin.
(b) Up to 10% of the salary amount required under subsection
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(a)(4) may be satisfied by the payment of nondiscretionary
bonuses, incentives and commissions annually or more frequently.
The employer may use any 52-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 shall apply. If by the last pay period of the
year the sum of the employee's weekly salary plus
nondiscretionary bonus, incentive and commission payments
received does not equal 52 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.
Section 3.2. Employment in Administrative Capacity.-- (a)
For purposes of this act, "employment in a bona fide
administrative capacity" means work by an individual:
(1) Whose primary duty is the performance of office or
nonmanual work directly related to management or general
business operations of the employer or the customers of the
employer.
The term "directly related to management or general business
operations" includes work in functional areas such as tax;
finance; accounting; budgeting; auditing; insurance; quality
control; purchasing; procurement; advertising; marketing;
research; safety and health; personnel management; human
resources; employee benefits; labor relations; public relations,
government relations; computer network, internet and database
administration; and legal and regulatory compliance.
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(2) Whose primary duty includes the exercise of discretion
and independent judgment with respect to matters of
significance.
(3) Who is compensated for services on a salary basis at a
rate of not less than:
(i) Eight hundred forty-four dollars ($844) per week
exclusive of board, lodging or other facilities, effective
October 3, 2027.
(ii) Nine hundred eighty-six dollars ($986) per week
exclusive of board, lodging or other facilities, effective
October 3, 2028.
(iii) One thousand one hundred twenty-eight dollars ($1,128)
per week exclusive of board, lodging or other facilities,
effective October 3, 2029.
(iv) Effective October 3, 2030, and each third year
thereafter, the weighted average 10th percentile wages for
Pennsylvania 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. The following procedure shall apply
under this paragraph:
(A) At least 90 days prior to the effective date of each 3-
year period in this subparagraph, the department shall submit to
the board the adjusted weekly salary rate under this
subparagraph and the information supporting the adjusted salary
rate.
(B) Upon review of the information submitted by the
department and a meeting to be held no later than 60 days before
the effective date, the board may provide advice and
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consultation to the secretary regarding the weekly salary rate.
(C) At least 30 days prior to the effective date of each
three-year period, the department shall publish this figure on
the department's publicly accessible Internet website and
transmit notice of the figure to the Legislative Reference
Bureau for publication in the next available issue of the
Pennsylvania Bulletin.
(b) Up to 10% of the salary amount required under subsection
(a)(3) may be satisfied by the payment of nondiscretionary
bonuses, incentives and commissions that are paid yearly or more
frequently. The employer may use any 52-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 shall apply. If by the last pay
period of the year the sum of the employee's weekly salary plus
nondiscretionary bonus, incentive and commission payments
received does not equal 52 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.
Section 3.3. Employment in Professional Capacity.--(a) For
purposes of this act, "employment in a bona fide professional
capacity" means work by an individual:
(1) Whose primary duty is the performance of work requiring
either of the following:
(i) knowledge of an advanced type in a field of science or
learning customarily acquired by a prolonged course of
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specialized instruction and study; or
(ii) invention, imagination, originality or talent in a
recognized field of artistic or creative endeavor.
(2) Who is compensated for services on a salary or fee basis
at a rate of not less than:
(i) Eight hundred forty-four dollars ($844) per week
exclusive of board, lodging or other facilities, effective
October 3, 2027.
(ii) Nine hundred eighty-six dollars ($986) per week
exclusive of board, lodging or other facilities, effective
October 3, 2028.
(iii) One thousand one hundred twenty-eight dollars ($1,128)
per week exclusive of board, lodging or other facilities,
effective October 3, 2029.
(iv) Effective October 3, 2030, and each third year
thereafter, the weighted average 10th percentile wages for
Pennsylvania 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. The following shall apply under
this paragraph:
(A) At least 90 days prior to the effective date of each
three-year period in this subparagraph, the Department shall
submit to the board the adjusted weekly salary rate under
subparagraph (iv) and the information supporting the adjusted
salary rate.
(B) Upon review of the information submitted by the
department and a meeting to be held no later than 60 days before
the effective date, the board may provide advice and
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consultation to the secretary regarding the weekly salary rate.
(C) At least 30 days prior to the effective date of each
three-year period, the department shall publish this figure on
the department's publicly accessible Internet website and shall
transmit notice of the figure to the Legislative Reference
Bureau for publication in the next available issue of the
Pennsylvania Bulletin.
(b) Up to 10% of the salary or fee amount required under
subsection (a)(2) may be satisfied by the payment of
nondiscretionary bonuses, incentives and commissions that are
paid yearly or more frequently. The employer may use any 52-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 shall apply. If
by the last pay period of the year the sum of the employee's
weekly salary plus nondiscretionary bonus, incentive and
commission payments received does not equal 52 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.
Section 2. All regulations and parts of regulations are
abrogated to the extent of any inconsistency with the provisions
of this act.
Section 3. This act shall take effect in 60 days.
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