Can managers and supervisors contribute to a tip pool? If you have questions about the Pennsylvania minimum wage, please ask us and someone will respond to you as soon as possible. Unless you're a state employee, the Pennsylvania minimum wage is $7.25, which is the same as the federally mandated minimum. Ever since Pennsylvanias Minimum Wage Act was passed in 1968, it has mirrored the minimum wage levels and salary exemption minimums set forth in the Fair Labor Standards Act. The employee is entitled to a shift differential of $2/hour for hours worked after 6:00pm. This rate must be used to calculate other wage and hour requirements such as overtime and spread of hours. Each threshold is different and may be increasing or remaining the same for the upcoming year. This is the same as the current Federal Minimum Wage rate. I own a restaurant that does not provide banquets, special functions, or package deals, but I do charge a service fee, am I affected by these regulations? While the laws requirements are similar, they are not identical. Photographs are for dramatization purposes only and may include models. However, they also were set to increase the minimum salary requirements under Pennsylvania law beyond the FLSAs requirements as follows: These regulations included additional automatic adjustments (i.e., increases) set to start in 2023. Being paid on a "salary basis" means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. If all employees are paid at least the state minimum wage or higher, tip pools may include both tipped and non-tipped employees. 1. Employers with 26 or more employees: $62,400 per year. Annually increased based on consumer price index starting January 1, 2024. Basic Minimum Rate (per hour): $15.50 Any work in excess of eight hours in one workday, in excess of 40 hours in one workweek, or in the first eight hours worked on the seventh day of work in any one workweek shall be at the rate of one and one-half times the regular rate of pay. Among the minimum wage bills in Congress is the Raise the Wage Act would increase the minimum wage to $9.50 per hour upon passage and gradually raise it to $15 per hour. Note: There is also a professional exemption under state law. Small employers (with 1-50 employees) will have a more gradual phase-in schedule to give them additional time to comply with the new rules compared to large companies (51 or . It also sets forth compliance-related duties for the Department of Labor & Industry and for employers. Therefore, employers should act quickly to ensure compliance with these changes and consult with counsel when analyzing these increases and when they become effective. For these two exemptions, the state generally sets the minimum salary requirement at 75 times the state minimum wage, which differs based on the region of the state. 1605 CEDAR CREST BLVD., SUITE 517, ALLENTOWN, PA 18104. To add further complexity, some states, like Minnesota, apply certain minimum wage increases based on an employer's revenue while other states, like Nevada, base minimum wage increases on whether an employer offers qualifying health benefits. The effect should be that the minimum salary requirements will remain the same under both the PMWA and the FLSA (i.e., $684 per week ($35,568 annually)). A tipped employee is someone who performs work that customarily and regularly receives more than $135 a month in tips. Statewide minimum wage: The statewide minimum wage rate for non-exempt (overtime-eligible) workers will rise to $14.49 per hour (up from $13.69), effective January 1, 2022. Under the states exemption for highly technical computer employees, the employee may be paid by salary (at least $961.54 per week in 2023) or by the hour ($31.41 per hour in 2023). Follow us on Facebook (opens a new window), Follow us on Twitter @JJKeller (opens a new window), Follow us on LinkedIn (opens a new window), Subscribe to our YouTube channel (opens a new window), Skip global navigation and go to main content, J. J. Keller Encompass Fleet Management System. Example 2: A manager in a restaurant takes food orders and refills some drinks while a tipped employee delivers food to the table and refills drinks. $500.00 total wages 40 Hours = $12.50 Per Hour Regular Rate. A bartender's directly supporting work includes slicing and pitting fruit for drinks, cleaning bar glasses, arranging bottles, and fetching liquor or supplies. $1,125.00 per week ($58,500.00 per year) Under state law, employers can pay 85 percent of the minimum wage to workers ages 14-15. Overtime Pay: $0.00. What are examples of tip-producing work? For 2023, the Colorado state minimum wage rate is $13.65. Managers, supervisors, or employers can only receive tips from patrons if they provide the entire service without assistance. Minimum Wage and Overtime Complaint Form. You may be paid under the Pennsylvania minimum wage if you fit into one of the following categories: The current Pennsylvania minimum wage of $7.25 per hour is the lowest amount a non-exempt employee in Pennsylvania can legally be paid for hourly work. The regulation increases the EAP salary threshold under Pennsylvania law to: $684 per week ($35,568 annually) effective October 3, 2020; Strategies for Protecting Standard Essential Patents, Health Plans Gag Clause Attestations Due December 31, 2023, Health Care & Life Sciences Sector Top Trends for 2023, Foley Appoints Kimberly Klinsport as Los Angeles Office Managing Partner, Foley Defeats $42 Million Jury Demand in Texas Trade Secrets Case, Three Foley Attorneys Selected for 2023 LCLD Fellows and Pathfinder Programs, Nathaniel Lacktman Discusses DEA Proposal to Expand Telemedicine Prescriptions, Threats of Antitrust Enforcement in the Supply Chain, DTC Healthcare Conference: How to Build and Scale a Multistate DTC Telemedicine Company, Stewarding ESG in the Mobility Supply Chain, American Health Law Associations Health Care Transactions 2023 Conference, Health Plan Transparency in Coverage Rule. A summary of these regulations can be found below or by accessing our individuals employed by the State of Arizona or United States government. Although the current minimum wage in the state is $7.25 per hour, six neighboring states are already at higher rates. Based on the foregoing, employers need to ensure that they are classifying employees correctly under the applicable law. You may continue to pay exempt EAP employees as little as $684 per week, the minimum required by federal law. She pointed out that 30 states and 64 municipalities have a minimum wage thats higher than the federal rate of $7.25, which took effect in 2009. The employer can take a tip credit for 32.5 hours of Issas 35-hour workweek, because she performs the tip-producing work of assisting guests with luggage and because her amount of directly supporting work does not exceed 20 percent of her weekly hours (20% of 32.5 hours = 6.5 hours) in which Issa is engaged in a tipped occupation. The employee is owed $2,062.50 for that week of pay including their $1,000 weekly salary, $500 in commissions, and $562.50 overtime pay. To qualify for the administrative, professional and executive exemptions in California, employees must meet certain salary and duties tests and must be paid at least twice the state minimum hourly wage based on a 40-hour week. If an employee works more than 40 hours in a workweek they must be paid 1.5 times their base rate for all hours worked beyond 40 hours. 2022 $11.15 effective January 1, 2022. Denver, which has it's own minimum wage independent from the state of Colorado, is increasing it's minimum wage to $15.87. No. $("span.current-site").html("SHRM China "); Usage is subject to our Terms and Privacy Policy. As a result of the Colorado Overtime & Minimum Pay Standards Order, the minimum salary required to qualify for the executive/supervisor, administrative, and professional exemptions under state law increased to $961.54 per week on January 1, 2023. No. Over a 4week period, the employee worked 40, 50, 44, and 46 hours. In June 2021, Governor Wolf agreed to repeal the final rule relating to the threshold increases in exchange for additional funding for public schools. We are your knowledge expert on this topic and can help if you have questions regarding this change. Her employer must pay her a direct cash wage equal to at least the minimum wage for the time spent performing non-tip generating duties over the eight hours mark, therefore Janet gets paid the full minimum wage for seven hours total per work week (15 hours of non-tipped directly supporting work the eight hours that are the 20% threshold = 7 hours of time she must be paid the full minimum wage). Minimum Wage for Employers with 26 Employees or More. However, the federal Fair Labor Standards Act (FLSA)does not require overtime pay for "any employee engaged in a bona-fide executive, administrative, or professional capacity" who is paid on a salaried basis instead of an hourly wage and meets the minimum salary threshold defined in federal regulations. $4,506.67. 541.400). Other state laws are focused on reaching a certain threshold. Minimum Wage. $54,080. 541.201-202). A hotel housekeeper's directly supporting work includes stocking the housekeeping cart. For the outside sales employee exemption, there is no minimum salary requirement. Beginning January 1, 2023, these employees must earn at least: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. Meet Miguel, who works as a server and works 30 hours a week (five hours a day, six days a week) at a restaurant. The repeal of the final rule, known as 2021 Act 70 became law on July 9, 2021. If you believe you are owed money by your employer, please file a complaint using the Salaried employees who perform executive, administrative, or professional duties and make more than the salary threshold per year are NOT eligible for overtime. The minimum salary for exempt employees in New York City remains at $1,125 per week or $58,500 per year. January 1, 2021. Read the NYS Division of the Budget Report , the Order of the Commissioner of Labor, and the Proposed Regulatory Text. total wages during a workweek, along with overtime incurred. Thus, an employee earning a salary more than $47,476 passes the salary level exempt test and continues to the subsequent exemption tests to determine overtime status. individuals employed by a small business, which includes . Approximately 8% of Pennsylvania's hourly workers are paid at or below the minimum wage. 3. ORS 653.010 (9); OAR 839-020-0004 (29). The DLIs October 2020 overtime exemption regulations increased the minimum salary requirement for the PMWAs white-collar overtime exemptions to $684 per week ($35,568 annually) on October 3, 2020, which matched the current level required by the FLSA. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. These regulations clarify that for the purpose of calculating overtime the regular rate is based on a 40-hour work week. State likes California, Colorado, and Washington raised the applicable salary thresholds while Pennsylvania returned to the federal standard due to a highly political repeal (and which may be overturned at some point in the future). Federal regulations regarding exemptions for executive, administrative, and professional employees from overtime remain in effect. All remunerations must be considered during the week that the remuneration is paid. The final regulation also makes modest revisions to the duties test, designed to more closely align the PMWA with its FLSA counterpart. ($1,000 weekly salary + $16 in shift differential)/40 hours = $25.40. Computer software employees may be paid on an hourly or a salary basis in order to qualify for exemption from California's overtime requirements. The national poverty line for a family unit consisting of two people is $16,020.00 per year. var currentLocation = getCookie("SHRM_Core_CurrentUser_LocationID"); Sharpen your regulatory knowledge by attending our webcasts, executive seminars and industry tradeshows. eliminates the requirement that administrative exempt employees customarily and regularly exercise discretion and independent judgment (instead requiring that their primary duty includes the exercise of discretion and independent judgment with respect to matters of significance). Colorado: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. The PMWA and FLSA both place minimum wage and overtime pay obligations on Pennsylvania employers. (29 CFR 541). overtime requirements. The USDOL provides information on its The minimum annual salary for exempt employees, currently at $35,568, would increase to more than $56,000 if the DOL adjusts the rate from its 2016 proposed rule for inflation. $684 per week ($35,568 annually) effective Oct. 3, 2020. All Pennsylvania employers must display an approved Pennsylvania minimum wage poster in a prominent place to inform employees about the minimum wage and their worker's rights under Pennsylvania labor law. Starting in 2017, California started a phase-in schedule to reach the $15 minimum wage for all employers. Act 102 Prohibition of Excessive Overtime in Health Care Act. The final regulation provides that an employer may satisfy up to 10% of the salary amount by the payment of nondiscretionary bonuses, incentives and commissions that are paid annually or more frequently.1At the end of the year (which period may be any 52-week period as defined by the employer), if the sum of the employees salary and any nondiscretionary bonuses, incentives and commissions do not equal at least 52 times the weekly minimum salary amount, the employer may make one final payment sufficient to achieve the required level, so long as the payment is made no later than the next pay period after the end of the year. The employee worked 50 hours last week, how much must they be paid for that week of work? The regulation increases the EAP salary threshold under Pennsylvania law to: Effective October 3, 2023 (and each third year thereafter), the salary threshold would reset automatically to the 10th percentile of Pennsylvania workers who work in exempt EAP classifications. Several surrounding states have a higher minimum wage than Pennsylvania, where the governor is again asking for a $15 minimum wage. 1 These earnings estimates do not account for the Pennsylvania income tax , federal income tax, or local/municipal income taxes. With few exceptions, hourly employees who work more than 40 hours a week must be paid time and a half for all hours over 40. Copyright year J. J. Keller & Associates, Inc. All rights reserved. On October 3, 2022, the threshold will once again increase, this time to $875 per week ($45,500 per year). For example, New York's minimum wage law is focused on reaching the $15.00 threshold. As a result, employers must pay a salary of at least $1,240 per week beginning January 1, 2023 to qualify for the exemption. For 2022, the wage for that younger group will be $12.32 per hour. The definitions of "primary duty," "customarily and regularly," "directly and closely related" or any of the other provisions of 29 C.F.R. Ohio - $9.30 (for employers with annual gross receipts of at least $342,000 per year); federal minimum wage of $7.25 for other employers Oregon - $13.50 (effective July 1, 2022) Puerto Rico - $8.50 Rhode Island - $12.25 South Dakota - $9.95 Vermont - $12.55 Virginia - $11.00 Washington - $14.49 Over a 4week period, the employee worked 40, 50, 44, and 46 hours. The Department of Labor has been holding stakeholder meetings on the topic, she said, and added that the changes could also include an update to the duties test that is also part of the employee exemption analysis. Last week, the employee worked 50 hours and earned $500 in commissions. 541.303(d) & .304(d)); include any version of the FLSAs regulation exempting computer professionals who are paid on an hourly basis (29 C.F.R. Yes, federal regulations allow up to 10 percent of the salary threshold can be satisfied by nondiscretionary bonuses, incentives, and commissions paid on an annual basis. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Employers should still regularly review the classification status of their employees. Littler Investigation Toolkit for Employers, Littler Inclusion, Equity and Diversity Playbook, Pennsylvania Moves One Step Closer to Substantially Increasing White Collar Exemption Salary Threshold. The City of San Diego's Earned Sick Leave and Minimum Wage Ordinance, San Diego Municipal Code (SDMC) Chapter 3, Article 9, Division 1 became effective on July 11, 2016. If you are unable to satisfy this minimum salary, you should reclassify your exempt employees to non-exempt, hourly employees prior to January 1, 2023. Effective July 24, 2009, the federal minimum wage is $7.25 per hour. As a result of a new state minimum wage, the salary thresholds used to determine which workers are exempt from overtime under state law also increased effective January 1, 2023: Note: Employers of any size may pay exempt computer professionals by the hour, provided they pay at least 3.5 times the minimum wage ($55.09 per hour in 2023). You can trust our expertise across subjects relating to labor, transportation, environmental, and worker safety. Businesses that provide banquets, special function, or package deals must provide patrons with contracts and menus with a statement that explains that services fees are not gratuities. 541.602 - .606); and. If an employee in California does not receive the minimum salary for exempt employees, they must seek any unpaid wages they are owed. Employers are required to ensure that the base hourly wage plus tips equals at least $7.25 per hour. Overtime in Health Care Act on reaching the $ 15.00 threshold, 2009, Order. 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Keller & Associates, Inc. all rights reserved: is... Shrm China `` ) ; Usage is subject to our Terms and Policy... Only receive tips from patrons if they provide the entire service without.! State of Arizona or United states government at higher rates wages during a workweek, with. Of work based on consumer price index starting January 1, 2024 they be paid an... Division of the final rule, known as 2021 Act 70 became law on July 9 2021! 35,568 annually ) effective Oct. 3, 2020 provide the entire service without assistance Pennsylvania minimum wage, please us! 70 became law on July 9, 2021 currentLocation = getCookie ( `` span.current-site '' ) ; Sharpen your knowledge! Or by accessing our individuals employed by a small business, which includes they paid... Threshold is different and may be increasing or remaining the same for the Pennsylvania income,... ).html ( `` span.current-site '' ).html ( `` span.current-site '' ) ; OAR 839-020-0004 ( 29.! 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