In wake of recent legislation aimed at increasing employee rights and safeguards, the Pennsylvania legislature has promulgated new wage and hour regulations restricting employers and providing greater protections for employees. The new wage and hour regulations are effective on August 5, 2022. The new regulations impact two categories of employees: (1) tipped employees; and (2) salaried employees with a fluctuating workweek schedule.
Under the new regulations, an employee is now considered “tipped” if he or she performs work that customarily and regularly receives more than $135 per month in tips. Pennsylvania law now diverges here from federal law as an employee is considered “tipped” under the federal standard if he or she receives at least $30 per month in tips. Employers of “tipped employees” are permitted to take a “tip credit” and pay their employees a reduced minimum wage, $2.83 per hour, so long as each employee’s base hourly wage plus tips equals at least $7.25 per hour, the required minimum wage. Accordingly, under the new regulations, Pennsylvania employers can only take a “tip credit” and pay a reduced minimum wage to their employees who receive more than $135 per month in tips.
The new regulations also update the “tip pooling” rules to align with federal law. Tip pools involving tip credit employees may only include those employees. However, tip pools that do not involve tip credit employees may include tipped and non-tipped employees....
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