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State snapshot

Key considerations
Which issues would you most highlight to someone new to your state?

Employers new to Pennsylvania should be aware that the Pennsylvania Human Relations Act applies to public and private employers with four or more employees, meaning that most employers in the state are subject to its prohibitions against discrimination and retaliation. It also applies to certain independent contractor relationships. Additionally, any employer new to the state (or new to a municipality within the state) should review any applicable local ordinances, as several municipalities have passed ordinances governing the employment relationship.

What do you consider unique to those doing business in your state?

Those doing business in Pennsylvania should be aware that the Pennsylvania Labor Relations Act extends the right to organize and bargain collectively to employees who are not covered by the National Labor Relations Act (NLRA). Generally, the Pennsylvania law reaches employees of employers that are not large enough to reach the NLRA’s jurisdictional threshold. 

Is there any general advice you would give in the labor/employment area?

Our general advice would be to beware of general advice. Labor and employment issues hinge on the facts of a given situation, and therefore taking a one-size-fits-all approach is not ideal. While Pennsylvania is generally supportive of employment at-will and will uphold reasonable post-employment restrictions against unfair competition, there are many nuances that can prove to be problems. 

Emerging issues
What are the emerging trends in employment law in your state, including the interplay with other areas of law, such as firearms legislation, legalization of marijuana and privacy?

Pennsylvania is among the states in which municipalities have passed local ordinances mandating paid sick leave, and restricting employers’ ability to make employment decisions on the basis of an applicant’s criminal history. Legislation to legalize medical marijuana was adopted in April 2016, and temporary regulations from the Department of Health are required to be issued by October 17 2016. 

Proposals for reform
Are there any noteworthy proposals for reform in your state?

There are no noteworthy proposals. The most important proposals for reform in Pennsylvania at present are:

  • proposed amendments to the Human Relations Act to add actual or perceived gender identity and sexual orientation; and
  • bills to further regulate/restrict employer use of criminal background checks.

Employment relationship

State-specific laws
What state-specific laws govern the employment relationship?

Anti-discrimination:

  • Pennsylvania Human Relations Act (43 Pa. Stat. Ann. §§ 951 to 963). 

Background checks:

  • Criminal History Record Information Act (18 Pa. Cons. Stat. §§ 9101 to 9183);
  • Private Detective Act (22 Pa. Stat. Ann. § 23);
  • Employees Having Contact with Children Act (23 Pa. Stat. Ann. §§ 6344 and 6344.4);
  • Prospective Employees of Public and Private Schools Act (24 Pa. Stat. Ann. §§ 1-111 and 5-527); and
  • Prospective Employees in a Family Daycare Home Act (23 Pa. Cons. Stat. § 6344.1).

Employee privacy:

  • Pennsylvania Wiretapping and Electronic Surveillance Control Act (18 Pa. Cons. Stat. §§ 5701 to 5782);
  • Pennsylvania Inspection of Employment Records Law (Personnel Files Act) (43 Pa. Stat. Ann. §§ 1321 to 1324); and 
  • Breach of Personal Information Notification Act (73 Pa. Stat. Ann. §§ 2301 to 2329).

Wage and hour:

  • Minimum Wage Act of 1968 (43 Pa. Stat. Ann. §§ 333.101 to 333.115);
  • Wage Payment and Collection Law (43 Pa. Stat. Ann. §§ 260.1 to 260.12);
  • Prevailing Wage Act (43 Pa. Stat. Ann. §§ 165-1 to 165-17);
  • Child Labor Act (43 Pa. Stat. Ann. §§ 40.1 to 40.14);
  • Seasonal Farm Labor Act (43 Pa. Stat. Ann. §§ 1301.101 to 1301.606); and 
  • Prohibition of Excessive Overtime in Health Care Act (43 Pa. Stat. Ann. §§ 932.1 to 932.6). 

Benefits:

  • Pennsylvania Mini-COBRA (40 Pa. Stat. Ann. § 764j).

Who do these cover, including categories of workers?

Pennsylvania Human Relations Act (43 Pa. Stat. Ann. §§ 951 to 963): 

  • Covers workers who either reside or work within Pennsylvania and who work for an employer with four or more employees within Pennsylvania. Also covers certain independent contractors.

Criminal History Record Information Act (18 Pa. Cons. Stat. §§ 9101 to 9183): 

  • Covers all employees within Pennsylvania.

Private Detective Act (22 Pa. Stat. Ann. § 23): 

  • Covers all employees of employers licensed under the Private Detective Act, including security companies, private detective agencies and employers that provide investigatory services.

Employees Having Contact with Children Act (23 Pa. Stat. Ann. §§ 6344 and 6344.4): 

  • Covers employees of childcare services, self-employed family daycare providers, individuals 14 years or older applying for paid positions as employees, individuals who are responsible for a child’s welfare, individuals who have direct contact with children, persons seeking to provide childcare services under contract with a childcare program or facility, school employees who are not governed by the provisions of the Public School Code of 1949, and operators of childcare services.

Prospective Employees of Public and Private Schools Act (24 Pa. Stat. Ann. §§ 1-111 and 5-527): 

  • Covers all prospective employees of public schools, private schools, intermediate units, and vocational-technical schools, including teachers, substitute teachers, janitors, and cafeteria workers. It also covers independent contractors and their employees.

Prospective Employees in a Family Daycare Home Act (23 Pa. Cons. Stat. § 6344.1): 

  • Covers all employees of family daycare home providers, and individuals aged 18 or older who live in the home for at least 30 days each calendar year.

Pennsylvania Wiretapping and Electronic Surveillance Control Act (18 Pa. Cons. Stat. §§ 5701 to 5782): 

  • Covers all employees.

Pennsylvania Inspection of Employment Records Law (Personnel Files Act) (43 Pa. Stat. Ann. §§ 1321 to 1324): 

  • Covers employees (including those on leave of absence), and former employees who were laid off with recall rights, of all public and private employers in Pennsylvania.

Breach of Personal Information Notification Act (73 Pa. Stat. Ann. §§ 2301 to 2329): 

  • Covers all employees of employers that maintain, store, or manage computerized data that includes personal information.

Pennsylvania Mini-COBRA (40 Pa. Stat. Ann. § 764j):

  • Employers of 2-19 employees.

Misclassification
Are there state-specific rules regarding employee/contractor misclassification?

 “Independent contractor” is defined neither by common law nor by a single statute in Pennsylvania. At common law, courts consider the following factors to determine whether an individual should be classified as an employee or as an independent contractor: 

  • the skill required to perform the job;
  • the source of tools or instruments used to perform the required work; 
  • the nature and location of the work;
  • the duration of the relationship between the parties;
  • whether the company can assign additional projects to the individual;
  • who controls the manner of the work performed;
  • the method of payment;
  • the individual’s role in hiring and paying assistants;
  • whether the work is part of the regular business of the company; 
  • the provision of benefits;
  • the terms of the agreement between the parties (although labelling an individual as an independent contractor in an agreement is insufficient to establish that the label is correct); and 
  • the tax treatment of the individual.

The following statutes specify what it means to be an independent contractor thereunder:

  • Unemployment Compensation Law (43 Pa. Stat. Ann. § 753(l)(2)(B);
  • Pennsylvania Human Relations Act (43 Pa. Stat. Ann. § 954(x); and
  • Construction Workplace Misclassification Act (43 Pa. Stat. Ann. § 933.3(a).

Contracts
Must an employment contract be in writing?

No, but employers are required to notify employees at the time of hire of:

  • the time and place of payment;
  • the rate of pay; and
  • the amount of any fringe benefits or wage supplements (43 Pa. Stat. Ann. § 260.4).

Are any terms implied into employment contracts?

No.

Are mandatory arbitration agreements enforceable?

Yes. 

How can employers make changes to existing employment agreements?

Changes to existing employment agreements will be dictated by the terms of the agreement. 

Hiring

Advertising
What are the requirements relating to advertising open positions?

Pennsylvania employers may not publish any notices or advertisements relating to employment which indicate any protected category-based preference, limitation, specification, or discrimination. 

Background checks
What can employers do with regard to background checks and inquiries?

(a) Criminal records and arrests

When hiring, Pennsylvania employers are permitted to consider only felony and misdemeanor convictions which relate to the applicant’s suitability to perform the duties of the position at issue. Employers must provide written notice to applicants who will not be hired if the decision is based in whole or in part on the applicant’s criminal history. Philadelphia makes it unlawful for employers to ask about criminal backgrounds during the job application process.

(b) Medical history

Pennsylvania employers may not elicit any information from job applicants about their medical history, or keep any records regarding an applicant’s medical history before employment begins.

(c) Drug screening

Pennsylvania employers are permitted to require drug screening.

(d) Credit checks

There is no Pennsylvania law governing what employers can do with regard to the use of credit checks in the context of background checks and inquiries. The Fair Credit Reporting Act is the sole concern for employers in this regard. 

(e) Immigration status

All employers are required to verify that every new hire is either a U.S. citizen or is authorized to work in the United States. Employers cannot discriminate against employees based on their immigration status, so once an employee shows that he or she is eligible to work in the United States, the employee’s immigration status should not be factored into any other employment decisions.

(f) Social media

There are no applicable laws governing what employers can do with regard to use of social media in the context of background checks and inquiries.

(g) Other

Pennsylvania employers may not elicit information regarding an applicant’s military status.

Wage and hour

Pay
What are the main sources of wage and hour laws in your state?

The main sources of wage and hour laws in Pennsylvania are as follows:

  • Minimum Wage Act of 1968 (43 Pa. Stat. Ann. §§ 333.101 to 333.115);
  • Wage Payment and Collection Law (43 Pa. Stat. Ann. §§ 260.1 to 260.12);
  • Prevailing Wage Act (43 Pa. Stat. Ann. §§ 165-1 to 165-17);
  • Child Labor Act (43 Pa. Stat. Ann. §§ 40.1 to 40.14);
  • Seasonal Farm Labor Act (43 Pa. Stat. Ann. §§ 1301.101 to 1301.606); and 
  • Prohibition of Excessive Overtime in Health Care Act (43 Pa. Stat. Ann. §§ 932.1 to 932.6). 

What is the minimum hourly wage?

The minimum wage in Pennsylvania in 2016 is $7.25 per hour. The minimum wage in Pennsylvania increases automatically to keep pace with increases in the minimum wage under federal law (43 Pa. Stat. Ann. § 333.104(a.1)).

What are the rules applicable to final pay and deductions from wages?

When an employee’s employment terminates, regardless of the reason, all unpaid compensation that the employee has earned must be paid by the next regular payday (43 Pa. Stat. Ann. § 260.5(a)). Employers are permitted to make deductions from employees’ pay as follows:

  • deductions authorized in writing or under a collective bargaining agreement for payments into company-operated thrift plans, or stock option or stock purchase plans, to buy publicly traded securities of the employer or an affiliated corporation at market price or less;
  • deductions authorized in writing for payment into personal savings accounts, including: 
    • payments to a credit union, savings fund society, savings and loan society association, or building and loan association; 
    • payments to bank savings departments for Christmas, vacation or other savings funds; and
    • deductions for the purchase of US government bonds;
  • charitable contributions authorized in writing;
  • contributions authorized in writing for local area development activities;
  • deductions provided by law, including deductions for taxes and deductions based on court orders;
  • union dues, assessments and initiation fees, and other labor organization charges authorized by law;
  • deductions for repayment of bona fide loans authorized in writing either at the time the loan is given or after;
  • deductions for purchases or replacements by the employee from the employer if the deductions are authorized in writing or by a collective bargaining agreement;
  • deductions authorized in writing for purchases by the employee for his or her convenience of goods and other items from third parties; and
  • other deductions authorized in writing by the employee that are allowed by the Pennsylvania Department of Labor and Industry and in line with the Wage Payment and Collection Law (34 Pa. Code § 9.1).

Hours and overtime
What are the requirements for meal and rest breaks?

Time allowed for meals is excluded from hours worked, and therefore is non-compensable, so long as the employee is neither required nor permitted to work during the meal period. Time spent on the employer’s premises for the convenience of the employee is excluded from hours worked (34 Pa. Code § 231.1(b)).

What are the maximum hour rules?

Pennsylvania law imposes maximum hour rules on minors. Minors aged 14 and 15 may not work more than three hours on school days, 8 hours on other days, or 18 hours per school week. During periods when school is not in session, minors aged 14 and 15 may not work more than 8 hours per day, or 40 hours per week. Minors aged 16 and 17 may not work more than 8 hours in a single day when school is in session, or more than 28 hours per week during a regular school week. During a school vacation period, minors aged 16 and 17 may not work more than 10 hours per day or 48 hours per week (and any hours in excess of 44 hours must be voluntarily agreed to by the minor) (43 Pa. Stat. Ann. § 40.3(d) and (f)).

How should overtime be calculated?

Overtime should be calculated for all hours in excess of 40 in a single week, at 1.5 times the employee’s regular rate of pay. Hospitals or establishments primarily engaged in the care of the sick, aged, or mentally ill, may utilize the “8 and 80” rule to calculate overtime on a 14-day, 80-hour work period rather than the traditional 40-hour working week. Courts have ruled that Pennsylvania law does not permit the use of the fluctuating working week method that is allowable under federal law.

What exemptions are there from overtime?

The Pennsylvania Minimum Wage Act includes the executive, administrative, professional, and outside sales exemptions available under federal law. Additionally, Pennsylvania law provides for exemption from overtime for certain employees of: 

  • retail establishments;
  • motor carriers;
  • public amusement or recreational establishments;
  • organized camps;
  • religious and non-profit organizations;
  • newspaper publishers having local or limited circulation; and 
  • motion picture theaters.

Finally, Pennsylvania law exempts individuals employed as salesmen, partsmen, or mechanics who primarily sell and service automobiles, trailers, trucks, farm implements, or aircraft, and who are employed by a non-manufacturing establishment.

Record keeping
What payroll and payment records must be maintained?

Pennsylvania’s Minimum Wage Act requires that employers keep accurate records of:

  • hours worked by each non-exempt employee; 
  • employees’ regular hourly rate of pay; 
  • work week by day and start and end times; 
  • the number of hours worked daily and weekly; 
  • total wages due for hours worked during the work week, including all straight-time wages due during any overtime worked; 
  • total premium compensation for overtime worked during the work week; 
  • total additions to and deductions from wages paid each pay period (and the date, amount, and category of the additions and deductions); 
  • allowances claimed as part of the minimum wage; 
  • total wages paid each pay period; and 
  • payment date and period covered by each payment.

Discrimination, harassment and family leave
What is the state law in relation to:

Protected categories
(a) Age?

Discrimination on the basis of age (any person 40 years of age or older) is prohibited under the Pennsylvania Human Relations Act.

(b) Race?

Discrimination on the basis of race is prohibited under the Pennsylvania Human Relations Act.

(c) Disability?

Discrimination on the basis of any non-job related handicap or disability is prohibited under the Pennsylvania Human Relations Act.

(d) Gender?

Discrimination on the basis of sex is prohibited under the Pennsylvania Human Relations Act.

(e) Sexual orientation?

The Pennsylvania Human Relations Act does not address discrimination on the basis of sexual orientation. Various local governments have rules prohibiting discrimination on this basis.

(f) Religion?

Discrimination on the basis of religion is prohibited under the Pennsylvania Human Relations Act.

(g) Medical?

The Pennsylvania Human Relations Act prohibits discrimination on the basis of one’s use of a guide or support animal because of blindness, deafness, or physical handicap.

Harassment
What is the state law in relation to harassment?

The Pennsylvania Human Relations Act prohibits workplace harassment, and courts generally analyze Pennsylvania Human Relations Act harassment claims under the same standards as claims brought under Title VII of the Civil Rights Act of 1964.

Family and medical leave
What is the state law in relation to family and medical leave?

Pennsylvania does not have a state law governing family and medical leave.

Privacy in the workplace

Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?

The legality of a workplace search in Pennsylvania is analyzed under common law tort principles. Employees in Pennsylvania have a right to be free from searches that constitute an unreasonable intrusion into their seclusion, but Pennsylvania courts have generally allowed employers to conduct reasonable workplace surveillance. Employers’ ability to monitor employees’ communications is limited by the Pennsylvania Wiretapping and Electronic Surveillance Control Act (18 Pa. Cons. Stat. §§ 5701 to 5782), which generally prohibits employers (and others) from intercepting or attempting to intercept wire, electronic, and oral communications (including telephone calls), and from using or disclosing (or attempting to use or disclose) the contents of a non-consensual, intentionally intercepted communication.

Are there state rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

There is no law in Pennsylvania specifically addressing social media in the employment context.

Bring your own device
What is the latest position in relation to bring your own device?

Pennsylvania law does not specifically address this issue.

Off-duty
To what extent can employers regulate off-duty conduct?

Pennsylvania law does not protect an employee’s lawful, off-duty use of tobacco.

Gun rights
Are there state rules protecting gun rights in the employment context?

No.

Trade secrets and restrictive covenants

Intellectual Property
Who owns IP rights created by employees during the course of their employment?

The employer owns the rights to intellectual property created by employees during the course of their employment.

Restrictive covenants
What types of restrictive covenants are recognized and enforceable?

Properly tailored non-compete covenants, non-solicitation covenants, and confidentiality covenants which are ancillary to employment and supported by consideration are recognized and enforceable under Pennsylvania law. Such agreements must be reasonable in time, scope and geography. Continued employment is not sufficient consideration for a non-competition or non-solicitation agreement under Pennsylvania law.

Non-compete
Are there any special rules on non-competes for particular classes of employee?

Rule 5.6 of the Pennsylvania Rules of Professional Conduct governs non-competes for attorneys in Pennsylvania and prohibits a lawyer from offering or making a partnership, shareholder, operating, employment or similar agreement that restricts lawyers from practicing after terminating the relationship (unless the agreement concerns benefits after retirement or is for the sale of a law practice). Further, a lawyer cannot offer or make an agreement that restricts a lawyer’s right to practice as part of a settlement of a client controversy. This is the only special rule in Pennsylvania governing non-competes for a particular class of employee.

Labor relations

Right to work
Is the state a “right to work” state?

No.

Unions and layoffs
Is the state (or a particular area) known to be heavily unionized?

Yes.

What rules apply to layoffs? Are there particular rules for plant closures/mass layoffs?

Pennsylvania does not have its own version of the federal Worker Adjustment and Retraining Notification Act; therefore, the federal act governs exclusively.

Discipline and termination

State procedures
Are there state-specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

No.

At-will or notice
At-will status and/or notice period?

Pennsylvania is an at-will employment state.

What restrictions apply to the above?

Pennsylvania employers may not take any adverse action against an employee because of the employee’s membership in a protected category or because of the employee’s engagement in a protected activity.

Final paychecks
Are there state-specific rules on when final paychecks are due after termination?

A former employee’s final paycheck must be provided to the employee no later than the next regular payday. A final paycheck must be sent to the employee by certified mail, if the employee requests payment via mail (43 Pa. Stat. Ann. § 260.5(a)).