The Pennsylvania Department of Labor and Industry (DLI) recently issued a final rule updating regulations under the Pennsylvania Minimum Wage Act (PMWA). The changes took effect Aug. 5, and impact three wage-and-hour compliance areas: tipped workers, service charges and the calculation of overtime.
With respect to tipped workers, the rule aligns Pennsylvania law with federal law as to the conditions for implementing a valid “tip pool” (including which employees may participate in such an arrangement) and the so-called “80/20 rule” (which limits how much time a tipped worker can spend in nontip-producing activities). The rule deviates from its federal counterpart in three important ways. First, it increased the threshold to qualify as a “tipped employee” from $30 per month (the current federal standard) to $135 per month. Second, it prohibits employers from deducting credit card processing and other fees from employee tips (a practice permitted under federal law). Finally, it confirms that the minimum cash wage for tipped employees in Pennsylvania is $2.83 per hour, higher than the federal $2.13 per hour minimum cash wage.
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