Pennsylvania Overtime Rules: Chevalier v. GNC 40-Hour Salaried Divisor
A comprehensive legal guide to calculating overtime for hourly and salaried employees under Pennsylvania law, the strict 40-hour divisor requirement, and exemption criteria.
Direct Answer Summary
In Pennsylvania, nonexempt salaried workers receive dramatically higher overtime pay than under federal law. Under 34 Pa. Code § 231.43(g) and the landmark Pennsylvania Supreme Court ruling in Chevalier v. GNC (2019), the regular rate is determined by dividing weekly pay strictly by 40 hours—never total hours worked. Overtime is paid at 1.5× this regular rate on top of base salary, strictly prohibiting the federal fluctuating workweek (FWW) 0.5× shortcut.
Calculate Your Pennsylvania Overtime
Compare hourly time-and-a-half with salaried 40-hour divisor overtime calculations.
1. The Statutory Rule: 40-Hour Workweek Standard
Under 43 P.S. § 333.105(a) and 34 Pa. Code § 231.41, employers must pay overtime at not less than 1.5 times the employee’s regular rate of pay for all hours worked in excess of 40 hours in a workweek.
Under 34 Pa. Code § 231.42, a workweek is defined as a fixed and regularly recurring period of 7 consecutive 24-hour days (168 consecutive hours). Pennsylvania law does not mandate daily overtime (such as overtime after 8 hours in California), nor does it require premium rates for working on weekends or holidays unless specified by contract.
2. Chevalier v. GNC: Rejection of the Fluctuating Workweek
In federal practice under 29 C.F.R. § 778.114, employers often use the Fluctuating Workweek (FWW) method. Under FWW, an employee’s salary covers straight-time for all hours worked, meaning an employee working 50 hours has their salary divided by 50 to establish an hourly rate, and is paid only half-time (0.5×) for the 10 overtime hours.
In Chevalier v. General Nutrition Centers, Inc., 220 A.3d 1038 (Pa. 2019), the Pennsylvania Supreme Court reviewed 34 Pa. Code § 231.43(g) and held that the PMWA intentionally rejected the federal fluctuating workweek method. The Court established two mandatory principles:
- Divisor Must Be 40 Hours: The regular hourly rate of pay for a salaried nonexempt worker must be determined by dividing the employee’s total weekly remuneration by 40, not by total hours worked.
- Multiplier Must Be 1.5× (Time-and-a-Half): Overtime hours must be compensated at 1.5 times this regular rate in addition to the employee’s weekly salary.
3. Mandatory Government-Source Calculation Scenarios
• Regular Rate of Pay = $1,000.00 ÷ 40 hours = $25.00/hr (Divisor is strictly 40, not 50!).
• Overtime Rate (1.5×) = 1.5 × $25.00 = $37.50/hr.
• Overtime Earnings = 10 overtime hours × $37.50 = $375.00.
• Total Compensation Required = $1,000.00 salary + $375.00 OT = $1,375.00.
(Under federal FWW, the employer would have paid only $1,100.00. Pennsylvania law requires $275.00 more!).
• Total Weekly Remuneration = $1,000.00 + $500.00 = $1,500.00.
• Regular Rate of Pay = $1,500.00 ÷ 40 hours = $37.50/hr.
• Overtime Rate (1.5×) = 1.5 × $37.50 = $56.25/hr.
• Overtime Earnings = 10 overtime hours × $56.25 = $562.50.
• Total Compensation Required = $1,500.00 + $562.50 = $2,062.50.
• Regular Wages = 40 hours × $20.00 = $800.00.
• Overtime Rate = 1.5 × $20.00 = $30.00/hr.
• Overtime Wages = 5 hours × $30.00 = $150.00.
• Total Compensation Required = $800.00 + $150.00 = $950.00.
• Under 34 Pa. Code § 231.43(a), nondiscretionary bonuses and commissions must be included in total straight-time earnings across all hours worked.
• Straight-Time Earnings = (45 hours × $20.00) + $100.00 bonus = $1,000.00.
• Regular Rate of Pay = $1,000.00 ÷ 45 hours = $22.22/hr.
• Overtime Premium (half-time) = 5 hours × 0.5 × $22.2222... = $55.56.
• Total Compensation Required = $1,000.00 + $55.56 = $1,055.56.
(Ignoring the bonus in the regular rate would unlawfully short the employee by $105.56!).
4. Exemption Standards & Federal Rule Vacatur
Under 43 P.S. § 333.105(a)(5) and 34 Pa. Code §§ 231.81–231.84, bona fide executive, administrative, and professional (EAP) employees are exempt from overtime.
In November 2024, the U.S. District Court for the Eastern District of Texas vacated the U.S. Department of Labor’s 2024 overtime regulation in State of Texas v. DOL. As a result, the federal threshold returned to the restored 2019 level of $684 per week ($35,568/year).
CRITICAL RULE: Meeting the salary threshold alone NEVER establishes exemption in Pennsylvania. The employer bears the burden of affirmatively proving that the employee satisfies all legal duties tests (e.g., managing a department, regularly supervising employees, exercising independent judgment on matters of significance).