Last fall, the Pennsylvania Department of Labor and Industry (DLI) issued a proposed rule to update regulations regarding two distinct issues under the Pennsylvania Minimum Wage Act (PMWA): payment of wages to tipped workers and calculating overtime for salaried nonexempt employees. DLI received 273 comments to its proposed rule, including comments from Littler Mendelson’s Workplace Policy Institute (WPI). On February 17, 2022, DLI submitted its final rule to the state’s Independent Regulatory Review Commission (IRRC) and legislative oversight committees. We are pleased to report that DLI took many of WPI’s comments into account when preparing the final rule. Nonetheless, the final rule would impose significant new obligations on employers.
Tipped Workers
The final rule makes seven significant changes to the regulations for tipped workers. The final rule more closely aligns with the federal rules on tipped workers, although differences remain.1
First, the final rule increases the threshold to qualify as a “tipped employee” from $30 per month (the current federal standard) to $135 per month. Thus, an employee must be engaged in an occupation in which they customarily and regularly receive more than $135 per month in tips.2
Second, the final rule incorporates by reference the “tip pooling” provisions of the federal regulations found at 29 C.F.R. § 531.54. Thus, Pennsylvania law regarding tip pooling will now “completely align” with federal law. Notably, this means that: (a)...
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