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TRADING STATE ASSISTANCE FOR EMPLOYEE COMPENSATION INCREASES


Kathy Speaker MacNett

November 16, 2021


Governor Tom Wolf issued Executive Order 2021-06, entitled Worker Protection and Investment, on October 21, 2021. https://www.governor.pa.gov/wp-content/uploads/2021/10/20211021_EO_2021-06_Worker-Protection.pdf. The Executive Order takes effect immediately and could impact for profit companies receiving loans, grants or tax breaks from the state, including programs offered through the Department of Community and Economic Development (DCED), such as the Redevelopment Assistance Capital Program. DCED will continue to require a minimum wage of at least $13.50 an hour until July 1, 2024, and $15.00 thereafter, under a previous Executive Order applicable to state contractors. Additionally, DCED is required to include a requirement for paid employee sick leave in their criteria for offers of assistance from the state. Those criteria are not defined in the Executive Order. Furthermore, all agencies under the Governor’s jurisdiction that provide funding to for profit businesses must consider creating an application requirement or a consideration factor during review of an application that includes compliance with the minimum wage described above and paid employee sick leave.


Under the new Executive Order, all agencies of the Commonwealth would have to develop grant and contracting processes that ensure that a company receiving a grant or contract certify its compliance with the following laws:


a. Construction Workplace Misclassification Act

b. Employment of Minors Child Labor Act

c. Minimum Wage Act

d. Prevailing Wage Act

e. Equal Pay Law.

f. Employer to Pay Employment Medical Examination Fee Act

g. Seasonal Farm Labor Act

h. Wage Payment and Collection Law

i. Industrial Homework Law

j. Construction Industry Employee Verification Act


Pennsylvania would also consider implementing federal occupational safety and health standards for state employees in Commonwealth offices.


Agencies under the Governor’s jurisdiction are to advise current and future vendors that compliance with Pennsylvania’s labor laws is expected and noncompliance could impact eligibility for state contracts and grants. Additionally, the Department of Labor and Industry shall maintain a listing of organizations that have been found to have violated labor laws, misclassified its workers, or who owe unemployment compensation, back taxes or failed to carry the required workers’ compensation insurance. This list will be publicly available and an organization will stay on the list until its legal obligations are satisfied.


As with everything related to COVID-19, stay tuned for further changes in law and interpretation.


This communication contains only general information and does not take the place of specific legal advice applied to specific factual settings. Nothing in this communication should be construed to create an attorney-client privilege.


For additional information or questions, contact Kathy Speaker MacNett.

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