Pa.’s at-risk businesses to gain access to millions in funding

Pennsylvania’s at-risk businesses are getting a financial boost from the Department of Labor and Industry. 

To support Rapid Response Services to stabilize at-risk businesses or attract buyers who would maintain the workforce of an at-risk company, the Department of Labor and Industry (L&I) announced $6 million in available Statewide Layoff Aversion Program funding. 

“When workers lose jobs with family-sustaining pay and benefits, it can destabilize entire communities,” L&I Acting Secretary Nancy Walker said in a statement. “Rapid Response Services are critical to minimizing the impacts of mass layoffs and closures, so that Pennsylvania communities and families have a real opportunity to rebound. 

“Likewise, with this grant funding, L&I will prioritize early intervention services aimed at preventing layoffs whenever possible,” she said. 

Pennsylvania provides Rapid Response Services under the Workforce Innovation and Opportunity ACT (WIOA). The services assist in early intervention and re-employment services for businesses and their employees affected by a permanent closure, mass layoff, or natural or other disaster resulting in mass job dislocation. 

Rapid Response engages with local businesses in their communities to provide job retention resources for potentially dislocated workers. This helps workers to find unemployment as soon as possible while also preventing loss of wages and economic uncertainty. 

Organizations with the experience and expertise to advance L&I’s goal of developing and using the state’s existing workforce development system to prevent layoffs and aid at-risk businesses are eligible to apply. 

Applicants who can create partnerships to coordinate the design of the project, develop and implement an appropriate budget, deliver services, collect and report performance management measures, and coordinate and evaluate the activities of the project are also eligible. 

Grant applications are due by 4 p.m. on April 3. Additional grant details and the grant application can be found on L&I’s website.

Lehigh state rep brings background in business and labor to new role

Ryan Mackenzie (R-Lehigh), already versed in the ways and means of the Pennsylvania House Labor and Industry Committee as vice chairman, has been appointed to serve as chairman for the 2023-24 Legislative Session. 

As the committee plays a crucial role in addressing policies that impact the state’s success economically, MacKenzie said his focus will be legislation that invests in workforce, protects employees and employers, promotes family-sustaining careers, and ensures workers are authorized legally to work in this country. 

“I have an extensive background in labor and business issues,” Mackenzie said in a statement, “and look forward to bringing that experience to the committee.” 

Mackenzie served as the director of policy at the Pennsylvania Department of Labor and Industry prior to being elected to office. He worked in his senior management role on issues relating to unemployment compensation reform, workers’ comp insurance, the Uniform Construction Code, and workforce development. 

Mackenzie helped lead bipartisan efforts that saved state taxpayers $100 million by refinancing debt and will save some $400 million per year by implementing additional reform measures. 

While with the U.S. Department of Labor, Mackenzie worked on domestic and international assignments and obtained a solid understanding of the dynamics of the labor market. 

Pennsylvania updating Minimum Wage Act rules for tipped workers

Pennsylvania Department of Labor & Industry Secretary Jennifer Berrier said her office has published final-form regulations that change Pennsylvania’s Minimum Wage Act rules by updating how employers pay tipped workers and ensuring that salaried employees with fluctuating schedules are appropriately compensated for overtime. 

The Independent Regulatory Review Commission unanimously approved the final-form regulations on March 21. Attorney General Josh Shapiro’s office also approved the regulations, which will go into effect Aug. 5. 

“The world of work has changed significantly since these regulations first went into effect in 1977, but tipped workers remain a sizeable and critical segment of Pennsylvania’s workforce. They are the only workers whose take-home pay ultimately depends on the generosity of their customers and not the obligation of their employer. This update to the Minimum Wage Act regulations aims to protect tipped workers in the 21st century and ensure consistency for employers,” Berrier said.  

The final-form regulation covers five primary areas for tipped workers, including:  

  • An update to the definition of “tipped employee,” adjusted for inflation since 1977, that increases the amount in tips an employee must receive monthly from $30 to $135 before an employer can reduce an employee’s hourly wage from $7.25 per hour to as low as $2.83 per hour. 
  • Alignment with new federal regulations codifying long-standing policies that govern employer tip credits to allow employers to take a tip credit under certain conditions, including that the employee spends at least 80 percent of their time on duties that directly generate tips, commonly known as the 80/20 rule. 
  • Alignment with updated federal regulations that allow for tip pooling among employees but in most cases excluding managers, supervisors, and business owners. 
  • A prohibition on employers deducting credit card and other non-cash payment processing transaction fees from an employee’s tip included with a credit card payment or other non-cash method of payment. 
  • A requirement for employers to clarify that automatic service charges are not gratuities for tipped employees.  

This final-form regulation also updates the definition of “regular rate” for salaried employees whose overtime pay is determined by the fluctuating workweek method, clarifying that for the purpose of calculating overtime the regular rate is based on a 40-hour work week.   


Pennsylvania unemployment rate falls in December 

Pennsylvania’s unemployment rate dropped from 5.7% in November to 5.4% in December, according to the state Department of Labor & Industry. 

The Commonwealth’s unemployment rate mirror a drop in the country’s rate, which fell from 4.2% in November to 3.9% in December.  

For Pennsylvania, December’s unemployment rate was 1.7% below December 2020’s rate of 7.1%.  

Pennsylvania’s civilian labor force – the estimated number of residents working or looking for work – decreased 18,000 over the month.  

Total nonfarm jobs in the state were up 14,300 over the month to 5,804,600 and jobs increased in eight of the 11 industry supersectors. 

The greatest increase was among jobs in the trade, transportation and utilities supersector, which saw an increase of 9,400. The second largest was leisure and hospitality at 3,300. 

Jobs in professional and business services saw the largest drop, being down 4,100. 

Over 2021, total nonfarm jobs were up 202,200 with gains in 10 of the 11 supersectors. Leisure and hospitality had the largest 12-month gain, adding 80,400 jobs. 

All supersectors continue to remain below their pre-pandemic job levels. 

January sees uptick in Pennsylvania unemployment

Pennsylvania saw a small over month uptick in unemployment in January.

The state Department of Labor & Industry reported that Pennsylvania’s unemployment rate rose 0.2 percentage points from December to 7.3 percent in January.

Meanwhile, the U.S. rate fell four-tenths of a percentage point from December to 6.3 percent.

Unemployment is still up dramatically over the same time last year, before the COVID-19 pandemic struck.

Comparatively, Pennsylvania’s unemployment rate was 2.5 percentage points above its January 2020 level while the national rate was up 2.8 points over the year.

Looking at other numbers, Pennsylvania’s civilian labor force – the estimated number of residents working or looking for work – decreased 15,000 over the month.

Pennsylvania’s total nonfarm jobs were up 35,700 over the month to 5,638,100 in January, essentially reversing December’s drop of 35,400.

Jobs increased in 4 of the 11 industry supersectors with the largest volume gain in professional & business services, which saw an increase of 12,100.


Pennsylvania raises salary threshold for overtime compensation

New overtime rules were scheduled to go into effect Oct. 3 that change the salary threshold of those eligible to receive overtime compensation in Pennsylvania.

Jerry Oleksiak, secretary of the Department of Labor & Industry, said it is the first update to the state’s overtime regulations in more than 40 years.

“The modernized regulation will expand eligibility for overtime to 143,000 people and strengthen overtime protections for up to 251,000 or more. This final rule ensures that employees who work overtime are fairly and fully compensated for their labor in accordance with the original intent of the Pennsylvania Minimum Wage Act,” he said.

Federal overtime regulations were updated in January. The federal government raised the federal overtime salary threshold to $35,568.

Pennsylvania’s overtime rule has set the minimum salary threshold at $45,500. The increase will be phased in three steps with the final threshold going into effect Oct. 3 2022.

Then, starting in 2023, the salary threshold will adjust automatically every three years.

Oleksiak noted that Pennsylvania’s new overtime rules allow up to 10 percent of the salary threshold to be satisfied by nondiscretionary bonuses, incentives, and commissions.

Pennsylvania requires employers to pay their employees at a rate of not less than $7.25 an hour for all hours worked and an overtime rate of 1.5 times the employee’s regular rate of pay for all hours worked above 40 in a work week.

The plan drew criticism from Adam Marles, president and CEO of LeadingAge PA, the voice for quality senior care in Pennsylvania, who said it would be harmful to employees and employers.

“Even before the drastic increase in costs and decrease in revenue due to the pandemic, long-term care facilities struggled due to insufficient funding from the state, and their position now is more precarious than ever,” Marles said in a written statement. “This proposal further threatens the ability for providers of high-quality care to continue keeping their doors open at a time when their services are more important than ever.”


Pa. unemployment benefits extended for first time since Great Recession

Pennsylvanians who exhaust their regular unemployment compensation benefits and federal Pandemic Emergency Unemployment Compensation (PEUC) can qualify for an up to 13-week extension beginning this week, state Department of Labor and Industry officials announced Monday.

Extended unemployment compensation benefits are additional payouts to qualified individuals whenever the state’s unemployment rate reaches a certain level determined by law. In Pennsylvania, the unemployment rate peaked at 16% in April and dropped to 13% in May, according to the latest data from the Department of Labor.

The last time the extended benefits program was triggered in Pennsylvania was in 2009 as the Great Recession took its toll.

State officials said there’s no application process for extended benefits; after the balance of an individual’s PEUC claim reaches $0, their claim for extended benefits will automatically set up in the state’s online portal approximately two days later, according to recent program announcements.

Weekly benefit payments under the extension are the same as regular unemployment benefits, but are restricted to half the time period as the claimant’s unemployment compensation period. In other words, if a claimant was financially eligible for 26 weeks of regular unemployment compensation, they could receive up to 13 weeks of extended benefits.

Since March 15, Pennsylvanians have received more than $21 billion in unemployment compensation, according to Monday’s announcement from the Department of Labor and Industry. That’s $9.6 billion from regular state unemployment compensation, $9.6 billion from the Federal Pandemic Unemployment Compensation, $2.2 billion to Pandemic Unemployment Assistants claimants and $129 million through the Pandemic Emergency Unemployment Compensation program.

Refinanced bonds will save Pa. employers $552M in 2020

Pennsylvania businesses will save an estimated $552 million in 2020 now that the state has finished refinancing 2013 federal loans that paid for the post-recession unemployment compensation fund.

Effective Jan. 1, 2020, the state Department of Labor and Industry slashed the 1.1% tax rate interest factor, reducing the unemployment tax rate to its lowest level since 1979. The interest rate of 1.1% was set in 2013 by Act 60 of 2012, to refinance bonds that funded state unemployment benefits at the lowest possible rate of interest, saving employers an estimate $57 million in interest costs during the last seven years.

Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry, said the 2008 recession put the state’s unemployment compensation fund in “financial crisis,” which forced the state to borrow money from the federal government in the form of bonds. Pennsylvania’s businesses will be relieved now that one of the country’s highest unemployment tax rates has been removed from their expense line, he said.

“We were proud to work with a bipartisan coalition of legislators and the [former Gov. Tom] Corbett administration to shore up this critical safety net and refinance the federal loan, which employers were still responsible for paying off, but under more favorable terms,” Barr said. “We are pleased employers can start off the New Year with a lower unemployment compensation tax rate and thank Gov. Wolf for recognizing the need to drive down business costs in PA.”

Workforce plan expects growth in health care, construction jobs; decline in manufacturing

Pennsylvania Department of Labor and Industry Secretary W. Jerry Oleksiak, pictured above, will work with Gov. Tom Wolf to create a pathway for robust employment in the commonwealth as the older generations age out of the workforce. PHOTO/DEPT. OF LABOR AND INDUSTRY

From now until Jan. 21, state officials are accepting comments for Gov. Tom Wolf’s federally mandated four-year workforce development plan, which seeks to coordinate the efforts of the state’s educational institutions, economic development programs and employers of the region’s major industries to create a pathway to optimal employment.

Anticipating a wave of retirements among 55-and-older workers in the next decade, the Department of Labor and Industry has set a goal of six in 10 Pennsylvanians holding a post-secondary degree by 2025.

“With an inevitable shortage of workers expected, Pennsylvania’s workforce strategies also must focus on the skills and abilities of individuals with barriers to employment, including individuals with disabilities, veterans, individuals transitioning into the community from the criminal justice system, individuals receiving TANF and those who do not speak English well or at all, among other populations, to meet present workforce needs and future demand,” says the department’s plan, released earlier this month.

The department’s plan cites data that indicate Pennsylvania has a strong goods-producing economy, even as the commonwealth transitions to a service-providing economy. Despite goods-producing job gains in percentage terms in 2018 exceeding those from service-providing industries over the last year, the longer trend indicates Pennsylvania’s economy will continue to shift from goods-producing to service-providing. Service-providing jobs in December 2018 were up 45,300 from one year prior but grew by 6.6% over the last 10 years.

Based on 2018 job growth, Pennsylvania’s best performing service-providing sectors were real estate (4.4%), transportation, warehousing and utilities (3.9%) and health care and social assistance (3%). Over the last decade, the latter two grew by 24.4% and 19.1%, respectively.

From 2016-2026, Pennsylvania’s total employment is expected to increase by 342,000 or 5.5%. This projection is less than that of the U.S. at 7.4%.

State officials expect the greatest employment expansion from now until 2026 to be in the commonwealth’s education and health services (147,000 estimated new jobs) and professional and business service sectors (73,000 estimated new jobs). Health care practitioners, technicians and support workers are expected to increase at the fastest rate of 13.3% or 79,000 workers by 2026. Jobs in computers, engineering and science are supposed to add 9.2% or 29,000.

At the same time, construction is projected to see a “robust” growth rate in jobs, 12.6%, which can be seen across all construction segments—civil engineering, building construction and specialty trade.

Driven by the downsizing of publishing and telecommunications, information is expected to decrease by 6.7%. Manufacturing and government are expected to decrease as well by 6% and 0.7%, respectively. Office/administration and production are both projected to see declines in employment through 2026 of -1.9% each—decreasing by 18,220 and 7, 540, respectively.

The full 284-page plan can be accessed on the department’s website. Comments can be emailed to [email protected] or mailed to 651 Boas St., Room 514 in Harrisburg by Jan. 21, 2020.