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State snapshot

Key considerations

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

 The primary differences between Pennsylvania and federal employment law are as follows:

  • Pennsylvania law applies to employers with four or more employees (15 or more employees under federal law);
  • Pennsylvania employment discrimination laws include individual liability for those who are found to “aid and abet” discrimination (no individual liability in federal anti-discrimination laws); and
  • overtime under the Pennsylvania Minimum Wage Act cannot be calculated on the “fluctuating work week” basis (federal overtime law includes the fluctuating work week).

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

See above.

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

 State courts in Pennsylvania are apt to decide cases on ‘fairness’ issues, especially in questions of restrictive covenants, employee classification issues and situations involving harassment or discrimination. Various counties in Pennsylvania have their own esoteric court procedures, and employers should be aware of the local rules related to trials and arbitrations before making a decision to move forward in litigation in Pennsylvania. 

Proposals for reform

Are there any noteworthy proposals for reform in your state?

Governor Tom Wolf has proposed changes to the minimum wage; those changes would reflect the initial changes proposed under the Fair Labor Standards Act regulations (which are currently in limbo). The proposal would raise the amount that certain salaried employees can earn and still qualify for overtime pay. The Wolf administration estimates that the proposed law will extend overtime eligibility to up to 460,000 Pennsylvania workers.

The Pennsylvania Department of Labor and Industry expects to release the proposal for public comments in March 2018. A final version of the rule would follow, unless derailed by the gubernatorial election later this year.

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?

Emerging trends in Pennsylvania are generally related to the hiring process (e.g. “ban-the-box” is becoming more prevalent in various cities and counties in the state). The Pennsylvania Human Relations Act is patterned largely on the federal anti-discrimination laws, and is unlikely to change substantially in the near future.

Employment relationship

State-specific laws

What state-specific laws govern the employment relationship?

The Pennsylvania laws most applicable to employment relationships in the state are:

  • the Pennsylvania Human Relations Act;
  • the Pennsylvania Minimum Wage Act;
  • the Pennsylvania Wage Payment and Collection Law; and
  • the Equal Pay Law.

Who do these cover, including categories of workers?

All employers with four or more employees are covered by the Pennsylvania Human Relations Act. Employees are covered whether they are hourly, salaried, part-time or full-time, as long as the four-or-more employee threshold is met. The act also applies to applicants.

Misclassification

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

The U.S. Department of Labor’s Wage and Hour Division and the Pennsylvania Department of Labor and Industry signed a three-year memorandum of understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. Therefore, Pennsylvania employers should assume that employee misclassification issues will be governed under federal law.

Also, the Pennsylvania Department of Labor and Industry administers the Construction Workplace Misclassification Act that prohibits employers from misclassifying construction workers as independent contractors.

Contracts

Must an employment contract be in writing?

 No, but once both parties have understood and mutually agreed on employment terms, the subsequent words and actions of the parties must preserve the agreed-upon intentions.

Are any terms implied into employment contracts?

Over and above agreed-upon employment terms, and even in the absence of a written agreement, an employee is obliged to render loyal, diligent, and faithful service to the employer. This means that an employee must act with the utmost good faith in the advancement of the employer’s interests.

Are mandatory arbitration agreements enforceable?

Generally, yes, so long as the language is a separate, clearly stated policy, expressly identifying various employment-related disputes to be covered, which is sent to each employee.

How can employers make changes to existing employment agreements?

  Written employment agreements can be modified according to their own terms.

Hiring

Advertising

What are the requirements relating to advertising open positions?

Pennsylvania law generally parallels federal law relating to advertising open positions. It is illegal to print, publish, or cause to be printed or published any notice or advertisement relating to employment indicating any preference, limitation, specification or discrimination based upon characteristics protected by the Pennsylvania Human Relations Act, unless such preference is based upon a good-faith occupational qualification for employment.

Background checks

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

a) Criminal records and arrests

Pennsylvania law prohibits an employer from considering an applicant's arrest records, juvenile adjudications, expungements and summary offense convictions. A Pennsylvania employer may consider conviction information regarding an applicant's criminal history record in making a hiring decision only to the extent that the applicant’s convictions relate to his or her suitability for employment in the applied-for position. Pennsylvania employers are prohibited from rejecting an applicant because of an arrest without a conviction. In addition, the City of Philadelphia has requirements that go beyond state law regarding criminal background checks, and should be referenced when applicable.

b) Medical history

Pennsylvania employers may not use tests that tend to screen out individuals with a handicap or disability unless the tests can be shown as job-related.

c) Drug screening

Pennsylvania law does not regulate or prohibit private employer drug testing. However, an employer that chooses to implement such a testing program should be aware of any privacy issues involved. In addition, a recent state law bans employers from discriminating against job applicants and employees for being medical marijuana cardholders.

d) Credit checks

Pennsylvania law provides that:

“It shall be an unlawful discriminatory practice for an employer to require, as a condition of employment, an employee or prospective employee to consent to the creation of a credit report that contains information about the employee's or prospective employee's credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers.”

Unless such a report is directly related to the position applied for, or unless certain exceptions are met (e.g. managerial positions and fiduciary positions are excluded).

In addition, a recent City of Philadelphia ordinance makes it unlawful for employers to use the credit information of Philadelphia job applicants or employees—unless covered by one of a number of exceptions—for employment decisions such as hiring, firing, or promotion.

e) Immigration status

Pennsylvania follows federal law on this issue, which means that Pennsylvania employers cannot discriminate against employees based on immigration status. Once an employee has proven to be eligible to work in the United States, the individual’s immigration status cannot be used in any other employment decisions.

f) Social media

There is no specific Pennsylvania statute precluding the use of social media to gather information on applicants for employment positions.

g) Other

Pennsylvania employers are prohibited from requiring an applicant or employee to take a polygraph/lie detector test as a condition for employment or for continuation of employment. This prohibition does not apply to applicants or employees in the field of public law enforcement, or who dispense or have access to narcotics or other dangerous drugs.

Wage and hour

Pay

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

The Pennsylvania Minimum Wage Act.

What is the minimum hourly wage?

Pennsylvania's minimum wage is the same as the federal minimum wage, $7.25 per hour at the time of writing (February 2018). The Pennsylvania minimum wage increases automatically with increases to the federal minimum wage.

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

The Pennsylvania Wage Payment and Collection Law requires all earned wages—defined broadly by the statute—of a terminated employee to be paid by the next regular payday, whether the termination is voluntary or involuntary. Deductions cannot be made unless by prior written agreement.

Hours and overtime

What are the requirements for meal and rest breaks?

Pennsylvania law includes no regulations regarding meal breaks except for minors, who must be provided an unpaid meal period of at least 30 consecutive minutes if they work more than five consecutive hours.

What are the maximum hour rules?

The Pennsylvania Minimum Wage Act does not include a maximum hour rule, other than for minors, which sets out maximum hours by age.

How should overtime be calculated?

Pennsylvania generally requires an employer to pay covered employees overtime at a rate of one and one-half times the regular rate for all hours worked in excess of 40 in a workweek. Overtime must be compensated on a workweek basis, regardless of whether the employee is compensated on an hourly wage, monthly salary, piece rate, or other basis. Overtime cannot be calculated on the fluctuating workweek basis, as is allowed under federal law.

What exemptions are there from overtime?

Cab drivers, salesmen, and motor carriers are exempt from Pennsylvania's overtime provisions, but not its minimum wage provisions.

Record keeping

What payroll and payment records must be maintained?

All Pennsylvania employers must keep records of each employee's:

  • name;
  • address;
  • ZIP code;
  • hourly rate of pay;
  • occupation;
  • starting and ending work times;
  • daily and weekly hours worked;
  • daily straight-time and overtime wages;
  • total overtime compensation;
  • additions to or deductions from wages;
  • total wages paid; and
  • the dates of each pay period.

Employers must also keep special records for tipped employees, students, and learners. Records must be retained for a minimum of three years.

Discrimination, harassment and family leave

What is the state law in relation to:

Protected categories

a) Age?

The Pennsylvania Human Relations Act applies to employers with four or more employees and sets out a list of protected categories against which an employer is prohibited from discriminating, including age.

b) Race?

The Pennsylvania Human Relations Act precludes discrimination based on race.

c) Disability?

The Pennsylvania Human Relations Act precludes discrimination based on disability.

d) Gender?

The Pennsylvania Human Relations Act precludes discrimination based on gender.

e) Sexual orientation?

There is no state law in Pennsylvania that specifically precludes discrimination based on sexual orientation or gender identity. However, some Pennsylvania cities and counties ban such discrimination, including Allentown, Erie, Philadelphia, Pittsburgh, and Reading.

f) Religion?

The Pennsylvania Human Relations Act precludes discrimination based on religion.

g) Medical?

The Pennsylvania Human Relations Act precludes discrimination based on medical impairments that rise to the level of disability.

h) Other?

The Pennsylvania Human Relations Act also protects individuals who require the use of support animals for certain disabilities, and those who are discriminated against because their diploma was earned via a General Educational development (GED) test. In addition, Pennsylvania law prohibits discrimination against an individual because of his or her membership in the Pennsylvania National Guard, the federal military reserves, or because the individual is called to active military duty. Pennsylvania also precludes discrimination in rates of pay between genders (Equal Pay Law) in the rate of pay on jobs that require equal skill, effort, and responsibility, and which are performed under similar working conditions.

Harassment

What is the state law in relation to harassment?

Harassment on the basis of race, color, national origin, religion, pregnancy, handicap/disability, age, gender, use of support animals, and educational status (diploma based on a GED) is a form of illegal discrimination and is prohibited under the Pennsylvania Human Relations Act.

Family and medical leave

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

There is no separate Pennsylvania law that parallels the federal Family and Medical Leave Act. However, under Pennsylvania law, if an employer provides leave for temporary disabilities (including a serious health condition), it also must specifically provide leave for pregnancy and pregnancy-related conditions. Further, if a Pennsylvania employer has a policy/practice of providing leave for purposes of childrearing after the period of the mother's leave for childbirth, the leave must be equally available to male employees.

Privacy in the workplace

Privacy and monitoring

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

Pennsylvania has a number of state and local statutes (including some common law) regarding privacy in the employment relationship. Those laws relate to:

  • criminal background checks;
  • polygraph testing;
  • telephone and computer monitoring; and
  • substance abuse testing.

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

Unlike other states, Pennsylvania has not enacted any state employment law regarding computer passwords, or limiting the monitoring of (or interception of) employees’ social media that would replace or supplement the federal Electronic Communications Privacy Act. Therefore, companies that do business in multiple jurisdictions that include Pennsylvania should stay up-to-date with the developments of other states’ laws.

Bring your own device

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

 Pennsylvania does not have a bring your own device law. Because of the speed with which mobile communication is changing, employers have been forced to adapt and create ad hoc policies based on the need for employee usage of mobile devices, privacy concerns regarding company data, and (recently) changes in global privacy laws. While this is an area where state laws may be of some use, there is no move in the state to formulate such laws.

Off-duty

To what extent can employers regulate off-duty conduct?

Pennsylvania statutes generally do not directly address an employer’s control of employees’ off-duty conduct. However, one state law deals with interference with an individual’s voting rights, and prohibits any person or corporation from inflicting injury, damage, harm, or loss to induce someone to vote in a particular manner or to refrain from voting. A dismissal from employment or an adverse change to an employee's terms and conditions of employment would appear to qualify as ‘harm’ or ‘loss’ within the meaning of that statute.

Also, while there are no Pennsylvania state laws regarding an employee’s use of social media outside of work, a number of local ordinances address employees’ use of social media to express political views, and require those views to be labeled as ‘personal’ and not work-related. 

Gun rights

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

Pennsylvania has no law that would interfere with an employer’s right to ban an employee from bringing a gun onto company premises.

Trade secrets and restrictive covenants

Intellectual property

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

Pennsylvania has no specific law on this issue and, therefore, federal law applies—which means that, unless an employee is hired with the specific purpose of inventing something, or unless his or her invention is created “within the scope of [the employee’s] employment”, then the employee automatically has ownership (copyright and patent rights) over any inventions created during employment. The mere fact of employment is not enough to transfer invention ownership to an employer, unless one of the two exceptions applies.

Restrictive covenants

What types of restrictive covenants are recognized and enforceable?

There are no Pennsylvania state laws related to restrictive covenants (non-competes). However, Pennsylvania courts typically will find a non-compete agreement to be enforceable if that agreement:

  • is incident to an employment relationship between the employer and employee;
  • imposes a reasonably necessary restriction for the purpose of protecting the employer's business interest; and
  • imposes restrictions that are reasonably limited in time and geographic area.

The Pennsylvania Supreme Court also has emphasized that non-compete agreements are not favored, and are viewed as a trade restraint that may prevent a former employee from earning a living. Therefore, Pennsylvania courts look at non-competes on a case-by-case basis to determine whether the burden that such an agreement imposes on a former employee is reasonable. The courts also may judicially limit restrictions to those that are “reasonably necessary” for the protection of the employer.

Non-compete

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

None, other than outlined above.

Labor relations

Right to work

Is the state a “right to work” state?

Pennsylvania is not a right-to-work state.

Unions and layoffs

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

While Pennsylvania currently is at an historic low percentage of unionized workers (12% in 2017), the state’s union membership rate has remained above the U.S. average during the entire period that such data has been available (since 1989). 

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

Nothing prohibits employers from shutting down, relocating, or downsizing, as long as the Pennsylvania employer complies with the federal Worker Adjustment and Retraining Notification Act. There are no additional state laws or regulations applicable to Pennsylvania employers.

Discipline and termination

State procedures

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

No state-specific law controls discipline or grievance procedures in Pennsylvania. Of course, if the employee is a union member, the applicable collective bargaining agreement would set the parameters for those actions.

At-will or notice

At-will status and/or notice period?

Pennsylvania is an at-will employment state, meaning that an employee can leave or be separated from employment for any reason or no reason.

What restrictions apply to the above?

Employment can be ended at any time, so long as that reason is not based on the employee’s protected characteristic(s) nor is in contravention of public policy (e.g. firing an employee because he or she has filed a workers’ compensation claim).

Final paychecks

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

The Pennsylvania Wage Payment and Collection Law states that whenever an employee is separated from employment, the wages or compensation earned "shall become due and payable not later than the next regular payday of his employer on which such wages would otherwise be due and payable".