The proposed regulation, now before a state oversight panel, would impose ‘robust and modernized guardrails’ to protect tipped workers, officials said
When he pitched his eighth, and final, budget to state lawmakers earlier this month, Democratic Gov. Tom Wolf included a familiar request: That the Republican-controlled General Assembly finally boost Pennsylvania’s minimum wage from the current $7.25 an hour, where it’s been parked for more than a decade, to $12 an hour by July 1, with the eventual goal of raising it to $15 an hour.
But even as he’s sought legislative authorization for a pay hike for all Pennsylvania workers, Wolf quietly has been taking executive action to raise wages for state workers under his control, and for other employees impacted by state government.
Last month, Wolf’s office announced it was raising the minimum wage for commonwealth employees to $15 an hour. That came on top of a March 2016 executive order raising wages for state workers to $10.15 an hour. The order again was amended in July 2018 to boost the wage to $12 an hour.
And this week, the administration moved to boost wages for tipped workers, such as restaurant servers with an update to the decades-old state rules that govern how employers can pay them.
There’s still a long road to go before it becomes the law of the land, but the action by the administration was a good first step.
Notably, the proposed rules increase the amount that a tipped employee must receive monthly from $30 to $135 before an employer can reduce their hourly pay from the current $7.25 an hour to the tipped rate of $2.83 an hour, the state Department of Labor & Industry said in a statement.
The new rules aim to “establish robust and modernized guardrails to protect tipped workers in the 21st century and ensure consistency for employers,” Labor & Industry Secretary Jennifer Berrier said.
The proposed rules, which now go to a state oversight agency for the first part of a long approval process, also would:
Align state regulations with federal rules allowing employers to take a tip credit, including that the employee spends at least 80 percent of their time on duties that generate tips. This is familiarly known as the ’80-20′ rule, the agency said in it statement.
Update state regulations to allow for tip pooling among employees, but excluding mangers, supervisors and business owners
Ban employers from deducting transaction fees from an employee’s tip left on a credit card or other non-cash payment method.
Require employers to clarify that automatic service charges don’t count as gratuities for tipped employees, the agency said in its statement.
“The world of work has changed significantly since these regulations first went into effect in 1977, but tipped workers remain a sizable and critical segment of Pennsylvania’s workforce,” Berrier said in the agency’s statement. “They are the only workers whose take-home pay ultimately depends on the generosity of their customers and not the obligation of their employer.”
Most of Pennsylvania’s surrounding states have each raised their respective minimum wages, according to an analysis by Axios.
Here’s a state-by-state breakdown, based on data compiled by the Economic Policy Institute:
Delaware: $9.25/hr. to $10.50/hr., 1/1/22
Maryland: $11.75/hr. to $12.50/hr., 1/1/22
New Jersey: $12/hr to $13/hr., 1/1/22
New York: $12.50/hr, with index raise, to $13.20
Ohio: $8.80/hr., with index raise starting 1/1/22
West Virginia: $8.75/hr., no increase
While Wolf has spent much of his eight years pressing, unsuccessfully, for a minimum wage hike, some Republicans have made smaller counter-offers, but none has ever garnered the votes it needs to make it all the way to Wolf’s desk. Wolf, joined by some Democratic allies, also has called for the elimination of the tipped wage.
Meanwhile, 25 states and 56 cities will raise their minimum wages by the end of 2022, Axios reported, citing data compiled by the National Employment Law Project. In many areas, the wage floor will meet or exceed $15 per hour.
But not in Pennsylvania — again. Unless lawmakers finally do the long overdue sane thing and raise the wage.