HB 1023 — 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
 1   Amending the act of January 17, 1968 (P.L.11, No.5), entitled
 2      "An act establishing a fixed minimum wage and overtime rates
 3      for employes, with certain exceptions; providing for minimum
 4      rates for learners and apprentices; creating a Minimum Wage
 5      Advisory Board and defining its powers and duties; conferring
 6      powers and imposing duties upon the Department of Labor and
 7      Industry; imposing duties on employers; and providing
 8      penalties," providing for employment in executive capacity,
 9      for employment in administrative capacity and for employment
10      in professional capacity.
11      The General Assembly of the Commonwealth of Pennsylvania
12   hereby enacts as follows:
13      Section 1.     The act of January 17, 1968 (P.L.11, No.5), known
14   as The Minimum Wage Act of 1968, is amended by adding sections
15   to read:
16      Section 3.1.     Employment in Executive Capacity.--(a)   For
17   purposes of this act, "employment in a bona fide executive
18   capacity" means work by an individual:
19      (1)     Whose primary duty is the management of the enterprise
20   in which the individuals are employed or of a customarily
21   recognized department or subdivision.
 1   The term "management" includes activities such as interviewing,
 2   selecting and training of employees; setting and adjusting
 3   employees' rates of pay and hours of work of employees;
 4   directing the work of employees; maintaining production or sales
 5   records for use in supervision or control; appraising employees'
 6   productivity and efficiency for the purpose of recommending
 7   promotions or other changes in status; handling employee
 8   complaints and grievances; disciplining employees; planning the
 9   work of employees; determining the techniques to be used to
10   perform work; apportioning the work among employees; determining
11   the type of materials, supplies, machinery, equipment or tools
12   to be used or merchandise to be bought, stocked and sold;
13   controlling the flow and distribution of materials or
14   merchandise and supplies; providing for the safety and security
15   of employees or the property; planning and controlling the
16   budget; and monitoring or implementing legal compliance
17   measures.
18      (2)    Who customarily and regularly directs the work of two or
19   more other employees.
20      (3)    Who has the authority to hire or fire other employees or
21   whose suggestions and recommendations as to the hiring, firing,
22   advancement, promotion or any other change of status of other
23   employees are given particular weight.
24      (4)    Who is compensated for services on a salary basis at a
25   rate of not less than:
26      (i)    Eight hundred forty-four dollars ($844) per week
27   exclusive of board, lodging or other facilities, effective
28   October 3, 2027.
29      (ii)     Nine hundred eighty-six dollars ($986) per week
30   exclusive of board, lodging or other facilities, effective

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 1   October 3, 2028.
 2      (iii)    One thousand one hundred twenty-eight dollars ($1,128)
 3   per week exclusive of board, lodging or other facilities,
 4   effective October 3, 2029.
 5      (iv)    Effective October 3, 2030, and each third year
 6   thereafter, the weighted average 10th percentile wages for
 7   Pennsylvania workers who work in exempt executive,
 8   administrative or professional classifications as determined by
 9   the department with advice and consultation by the board and
10   based on an annual wage survey of all worker classifications
11   conducted by the department. The following procedure shall apply
12   under this paragraph:
13      (A)    At least 90 days prior to the effective date of each
14   three-year period in this subparagraph, the department shall
15   submit to the board the adjusted weekly salary rate under this
16   subparagraph and the information supporting the adjusted salary
17   rate.
18      (B)    Upon review of the information submitted by the
19   department and at a meeting to be held no later than 60 days
20   before the effective date of the adjusted weekly salary rate,
21   the board may provide advice and consultation to the secretary
22   regarding the adjusted weekly salary rate.
23      (C)    At least 30 days prior to the effective date of each
24   three-year period in this subparagraph, the department shall
25   publish the adjusted weekly salary rate on the department's
26   publicly accessible Internet website and shall transmit notice
27   of the annual wage survey report to the Legislative Reference
28   Bureau for publication in the next available issue of the
29   Pennsylvania Bulletin.
30      (b)    Up to 10% of the salary amount required under subsection

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 1   (a)(4) may be satisfied by the payment of nondiscretionary
 2   bonuses, incentives and commissions annually or more frequently.
 3   The employer may use any 52-week period as the year, such as a
 4   calendar year, fiscal year or anniversary of hire year. If the
 5   employer does not identify some other year period in advance,
 6   the calendar year shall apply. If by the last pay period of the
 7   year the sum of the employee's weekly salary plus
 8   nondiscretionary bonus, incentive and commission payments
 9   received does not equal 52 times the weekly salary amount
10   required under this section, the employer may make one final
11   payment sufficient to achieve the required level no later than
12   the next pay period after the end of the year. A final payment
13   made after the end of the year may count only toward the prior
14   year's salary amount and not toward the salary amount in the
15   year it was paid.
16      Section 3.2.     Employment in Administrative Capacity.--(a)
17   For purposes of this act, "employment in a bona fide
18   administrative capacity" means work by an individual:
19      (1)   Whose primary duty is the performance of office or
20   nonmanual work directly related to management or general
21   business operations of the employer or the customers of the
22   employer.
23   The term "directly related to management or general business
24   operations" includes work in functional areas such as tax;
25   finance; accounting; budgeting; auditing; insurance; quality
26   control; purchasing; procurement; advertising; marketing;
27   research; safety and health; personnel management; human
28   resources; employee benefits; labor relations; public relations,
29   government relations; computer network, internet and database
30   administration; and legal and regulatory compliance.

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 1      (2)    Whose primary duty includes the exercise of discretion
 2   and independent judgment with respect to matters of
 3   significance.
 4      (3)    Who is compensated for services on a salary basis at a
 5   rate of not less than:
 6      (i)    Eight hundred forty-four dollars ($844) per week
 7   exclusive of board, lodging or other facilities, effective
 8   October 3, 2027.
 9      (ii)    Nine hundred eighty-six dollars ($986) per week
10   exclusive of board, lodging or other facilities, effective
11   October 3, 2028.
12      (iii)    One thousand one hundred twenty-eight dollars ($1,128)
13   per week exclusive of board, lodging or other facilities,
14   effective October 3, 2029.
15      (iv)    Effective October 3, 2030, and each third year
16   thereafter, the weighted average 10th percentile wages for
17   Pennsylvania workers who work in exempt executive,
18   administrative or professional classifications as determined by
19   the department with advice and consultation by the board and
20   based on an annual wage survey of all worker classifications
21   conducted by the department. The following procedure shall apply
22   under this paragraph:
23      (A)    At least 90 days prior to the effective date of each 3-
24   year period in this subparagraph, the department shall submit to
25   the board the adjusted weekly salary rate under this
26   subparagraph and the information supporting the adjusted salary
27   rate.
28      (B)    Upon review of the information submitted by the
29   department and a meeting to be held no later than 60 days before
30   the effective date, the board may provide advice and

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 1   consultation to the secretary regarding the weekly salary rate.
 2      (C)   At least 30 days prior to the effective date of each
 3   three-year period, the department shall publish this figure on
 4   the department's publicly accessible Internet website and
 5   transmit notice of the figure to the Legislative Reference
 6   Bureau for publication in the next available issue of the
 7   Pennsylvania Bulletin.
 8      (b)   Up to 10% of the salary amount required under subsection
 9   (a)(3) may be satisfied by the payment of nondiscretionary
10   bonuses, incentives and commissions that are paid yearly or more
11   frequently. The employer may use any 52-week period as the year,
12   such as a calendar year, fiscal year or anniversary of hire
13   year. If the employer does not identify some other year period
14   in advance, the calendar year shall apply. If by the last pay
15   period of the year the sum of the employee's weekly salary plus
16   nondiscretionary bonus, incentive and commission payments
17   received does not equal 52 times the weekly salary amount
18   required by this section, the employer may make one final
19   payment sufficient to achieve the required level no later than
20   the next pay period after the end of the year. A final payment
21   made after the end of the year may count only toward the prior
22   year's salary amount and not toward the salary amount in the
23   year it was paid.
24      Section 3.3.     Employment in Professional Capacity.--(a)   For
25   purposes of this act, "employment in a bona fide professional
26   capacity" means work by an individual:
27      (1)   Whose primary duty is the performance of work requiring
28   either of the following:
29      (i)   knowledge of an advanced type in a field of science or
30   learning customarily acquired by a prolonged course of

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 1   specialized instruction and study; or
 2      (ii)    invention, imagination, originality or talent in a
 3   recognized field of artistic or creative endeavor.
 4      (2)    Who is compensated for services on a salary or fee basis
 5   at a rate of not less than:
 6      (i)    Eight hundred forty-four dollars ($844) per week
 7   exclusive of board, lodging or other facilities, effective
 8   October 3, 2027.
 9      (ii)    Nine hundred eighty-six dollars ($986) per week
10   exclusive of board, lodging or other facilities, effective
11   October 3, 2028.
12      (iii)    One thousand one hundred twenty-eight dollars ($1,128)
13   per week exclusive of board, lodging or other facilities,
14   effective October 3, 2029.
15      (iv)    Effective October 3, 2030, and each third year
16   thereafter, the weighted average 10th percentile wages for
17   Pennsylvania workers who work in exempt executive,
18   administrative or professional classifications as determined by
19   the department with advice and consultation by the board and
20   based on an annual wage survey of all worker classifications
21   conducted by the department. The following shall apply under
22   this paragraph:
23      (A)    At least 90 days prior to the effective date of each
24   three-year period in this subparagraph, the Department shall
25   submit to the board the adjusted weekly salary rate under
26   subparagraph (iv) and the information supporting the adjusted
27   salary rate.
28      (B)    Upon review of the information submitted by the
29   department and a meeting to be held no later than 60 days before
30   the effective date, the board may provide advice and

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 1   consultation to the secretary regarding the weekly salary rate.
 2      (C)   At least 30 days prior to the effective date of each
 3   three-year period, the department shall publish this figure on
 4   the department's publicly accessible Internet website and shall
 5   transmit notice of the figure to the Legislative Reference
 6   Bureau for publication in the next available issue of the
 7   Pennsylvania Bulletin.
 8      (b)   Up to 10% of the salary or fee amount required under
 9   subsection (a)(2) may be satisfied by the payment of
10   nondiscretionary bonuses, incentives and commissions that are
11   paid yearly or more frequently. The employer may use any 52-week
12   period as the year, such as a calendar year, fiscal year or
13   anniversary of hire year. If the employer does not identify some
14   other year period in advance, the calendar year shall apply. If
15   by the last pay period of the year the sum of the employee's
16   weekly salary plus nondiscretionary bonus, incentive and
17   commission payments received does not equal 52 times the weekly
18   salary amount required by this section, the employer may make
19   one final payment sufficient to achieve the required level no
20   later than the next pay period after the end of the year. A
21   final payment made after the end of the year may count only
22   toward the prior year's salary amount and not toward the salary
23   amount in the year it was paid.
24      Section 2.   All regulations and parts of regulations are
25   abrogated to the extent of any inconsistency with the provisions
26   of this act.
27      Section 3.   This act shall take effect in 60 days.




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