These regulations have not been updated since 1977.,
Harrisburg, PA – Pennsylvania Department of Labor and Industry (L&I) Secretary Jennifer Berrier announced that changes to regulations in the Pennsylvania Minimum Wage Act go into effect today, Friday, August 5, in order to protect the wages earned by thousands of workers across the commonwealth and leveling the playing field for employers competing in a tight labor market.
The modernized regulations — approved by the Independent Regulatory Review Commission (IRRC) in March and by Attorney General Josh Shapiro’s office soon after — update how employers tip workers and ensure that salaried employees with flexible hours be properly compensated for overtime.
“As a former service industry employee, I have seen firsthand how employees can be disadvantaged by outdated rules and regulations when it comes to how they are paid,” said Secretary Berrier. “Servers, bartenders, hairdressers, nail technicians, bellhops and dozens of other tipping positions rely on the generosity of their customers for their livelihoods and deserve regulatory protections that ensure these wages earned are theirs to keep. I know this struggle personally, hoping you make enough money each shift to cover expenses. These updated regulations are not only intended to keep tips in the pockets of workers who have rightfully earned them, but also ensure that employers to play by the same fair rules.”
The final form regulation covers five main areas for tipped workers, including:
- An update to the definition of “tipped employee,” adjusted for inflation since 1977, that increases the amount of tips an employee must receive each month from $30 to $135 before an employer can reduce an hourly wage an employee from $7.25 an hour to $2.83. in hour.
- Alignment with a recent federal regulatory update governing employer tip credits to allow employers to receive a tip credit under certain conditions, including that the employee spend at least 80 percent of his time on tasks that generate tip directly, commonly known as the 80/20 rule.
- Alignment with a recent federal regulatory update to allow pooling of tips among employees, but in most cases excluding managers, supervisors and business owners.
- A prohibition on employers deducting credit card transaction fees and other non-cash payments from the tip of an employee who has left a credit card or other non-cash payment method.
- A request for employers to clarify that automatic service charges are not remuneration for tipped employees.
This final form regulation also updates the definition of “regular rate” for salaried employees whose overtime pay is determined by the workweek fluctuating method, clarifying that for the purpose of calculating overtime, the regular rate is based on in a 40 hour work week.
It is important to note that these updates do not change the overtime compensation regulations for hourly workers.
This regulatory proposal is part of Governor Wolf’s broader worker protection agenda and the administration’s commitment to fighting for workers to have fair wages, paid sick leave, safe workplaces and quality jobs. The governor signed an executive order in October 2021 on behalf of Pennsylvania workers and has repeatedly called on the General Assembly to finally pass legislation that supports workers.
Governor Wolf has called on the General Assembly to pass SB 12, sponsored by Sen. Tina Tartaglione, or HB 345, sponsored by Rep. Patty Kim, to raise Pennsylvania’s minimum wage to $12 an hour with one way to $15 and eliminate parole. The governor also supports eliminating the $2.83 hourly minimum wage for tipped workers and establishing a fair wage for all Pennsylvania workers.
For more information, you can visit the L&I Overtime and Tipping Rules page or follow us on Facebook, I tweetand LinkedIn.
MEDIA CONTACT: Alex Peterson, [email protected]
# # #
