According to the Fair Labor Standards Act (FLSA), the federal minimum wage is $7.25 an hour for nonexempt employees. The Pennsylvania state minimum wage for 2023 is consistent with the federal minimum wage at $7.25 an hour. The 2024 PA minimum wage stands to remain at $7.25 per hour. The Pennsylvania Minimum Wage Act does extend the requirements of minimum wage in the state in certain instances. This guide will help Pennsylvania businesses navigate minimum wage compliance.
Updated: November 21, 2023
Pennsylvania Minimum Wage Requirements
On June 20th, 2023, the Pennsylvania House of Representatives passed H.B.1500, which is currently under consideration by the Pennsylvania Senate. This legislation - if passed - would raise the PA minimum wage to $11.00 per hour by January 1, 2024 with further increases each year. The proposed bill would raise the minimum wage to $13.00 per hour by January 1, 2025 and $15.00 per hour by January 1, 2026. Then in 2027 - similar to what is now implemented by many other states - the minimum wage would be pegged to inflation via the Consumer Price Index (CPI).
Enforced by the Bureau of Labor Law Compliance, part of the Pennsylvania Department of Labor and Industry (PDLI), the requirements of Pennsylvania minimum wage are more expansive than in many other states.
The current 2023 and likely 2024 minimum wage in Pennsylvania is $7.25 an hour, the same as the federal minimum wage - according to the Fair Labor Standards Act (FLSA). An employee's wage includes all forms of compensation. This includes salaries, tips, and costs of boarding or employee housing. This applies to most nonexempt employees in the state.
Pennsylvania Special Minimum Wage
Pennsylvania does have special minimum wage requirements for the following types of workers:
In some circumstances, businesses may obtain a subminimum wage certificate from the PDLI which authorizes businesses to pay these types of employees at a wage rate as little as 85% of the state minimum wage. To receive these certificates, employers must file an application with the PDLI and meet the criteria specified for each group. Businesses must retain certificates for at least three years after the termination of the employee.
Pennsylvania Tipped Employees
Pennsylvania state law allows businesses to only pay a minimum wage of $2.83 per hour to employees that also receive tips. However, tips received must at least equal the state minimum wage when added to the tipped wage.
Previously, to qualify for this exemption to the state minimum wage, workers in Pennsylvania must also earn at least $30 per month in tips. Updated on August 5th, 2022, employees now have to earn at least $135 per month in tips to qualify.
According to the updated requirements that began on August 5th, 2022, Pennsylvania follows the 80/20 rule when it comes to tipped wages. Employees can qualify as a tipped employee as long as that employee does not spend more than 20% of the 7-day previously established workweek performing duties that do not directly generate tips.
Other requirements of tipped wages regarding credit card deductions, service charges, and tip pooling can be found here.
Pennsylvania Working Students
Pennsylvania state law allows employers to claim a minimum wage exemption for working students, whether the school is in session or not. However, once a student worker has received a degree, certificate, or diploma from their place of learning, they are no longer considered a student.
Important things for businesses to remember in regard to hiring and employing students include:
- Businesses must obtain a special certificate in order to authorize the subminimum wage for students
- Wages paid to students cannot be less than 85% of the Pennsylvania minimum wage ($6.16 per hour).
- Students cannot work for more than 20 hours a week when school is in session and more than 40 hours a week during school vacation periods
- Businesses with seven or more student workers that receive a subminimum wage must provide proof to the PDLI that they also maintain a ratio of 3 regular employees to each student. This is to prove that the employment of such students will not create a substantial probability of reducing the full-time employment opportunities for other workers.
Learners are individuals who are under the age of 20 and are participating in a training program for the occupations for which they were hired. Learners are exempt from the Pennsylvania state minimum wage requirements and can be paid as low as 85% of the state minimum wage ($6.16 per hour). Pennsylvania employers must obtain a special certificate to be authorized with the subminimum wage of learners.
The training periods for learners must be at least two weeks long and cannot exceed eight weeks unless the PDLI authorizes an exception. Once a worker has completed the training program, they'll no longer be considered as a learner and will no longer qualify for the Pennsylvania minimum wage exception.
Please note that businesses in Pennsylvania may only pay subminimum wages to their learner-employees during the first 60 calendar days of employment. The PDLI may limit the ratio of learners to non-learners, as well as regulate the subminimum wage they receive.
Pennsylvania Workers with Disabilities
Businesses in Pennsylvania may be able to pay a subminimum wage to workers with disabilities if the worker's "capacity for the work to be performed is impaired by physical or mental deficiency or injury". The special minimum wage will be determined based on the productivity of the individual that is in proportion to the wages paid to employees without disabilities performing essentially the same work.
Pennsylvania Minimum Wage Exceptions
The following types of workers are exempt from minimum wage requirements in the state of Pennsylvania:
- Farm laborers
- Independent contractors
- Executive, administrative, or professional employees
- Domestic employees
- Educational, charitable, religious, or nonprofit organization volunteers
- Seasonal employees 18 years of age or younger (age 24 or younger for students)
- Religious or nonprofit educational conference center employees
- Golf caddies
- Newspaper delivery and publication employees, when the newspaper has a circulation of less than 4,000 and its major circulation is within the county (or contiguous counties) where the paper is published
- Public amusement, recreational establishment, or organized camp employees
- Switchboard operators working for an independently owned public telephone company having no more than 750 stations
- Employees not subject to civil service laws who hold elective office or are on the personal staff of an officeholder, are immediate advisers to him or her, or are appointed by the officeholder to serve on a policy-making level
Pennsylvania Minimum Wage Posting Requirements & Penalties
Businesses must post a summary of the Pennsylvania Minimum Wage Act in an easily accessible and visible place.
In addition, to being prohibited from taking adverse action against an employee for cooperating in a PDLI wage investigation, businesses may incur the following penalties for non-compliance:
- General Violations
- $100 - $500 fine. Each day of violation is a separate offense.
- Paying Wages Below Minimum Rate
- $75 - $300 fine, and / or between 10 and 60 days of prison time
- Each week of noncompliance is considered a separate offense.
- Adverse Action Against an Employee for Investigation Cooperation
- $500 - $1,000 fine. Failure to pay can result in 10 to 90 days of prison time.
Important for businesses to note is that in addition to the above fines, employees may file a lawsuit to recover lost or unpaid wages.
Final Thoughts on Pennsylvania Minimum Wage
Businesses that are struggling to maintain minimum wage compliance or process payroll may want to seek help from a Pennsylvania Payroll Provider or may want to take the time to learn more about modern payroll solutions. To learn more about how Paytime is helping countless businesses maintain minimum wage compliance, contact us today.