The PA Department of Labor & Industry revised its regulations applicable to the service industry work force. Here are the five key points:
- An update to the definition of "tipped employee," adjusted for inflation since 1977, that increases the amount in tips an employee must receive monthly from $30 to $135 before an employer can reduce an employee's hourly pay from $7.25 per hour to as low as $2.83 per hour.
- Alignment with a recent federal regulatory update governing employer tip credits to allow employers to take a tip credit under certain conditions, including that the employee spends at least 80 percent of their time on duties that directly generate tips, commonly known as the 80/20 rule.
- Alignment with a recent federal regulatory update to allow for tip pooling among employees but in most cases excluding managers, supervisors, and business owners.
- A prohibition on employers deducting credit card and other non-cash payment processing transaction fees from an employee's tip left with a credit card or other non-cash method of payment.
- A requirement for employers to clarify that automatic service charges are not gratuities for tipped employees.
Here is the DLI's summary: