On June 20, 2023, House Bill No. 1500 passed in the Pennsylvania House of Representatives. HB 1500 aims to amend Pennsylvania’s Minimum Wage Act to increase the minimum wage in Pennsylvania to $15.00 per hour by 2026. How will this affect your business?
Proposal
Representatives Jason Dawkins and Patty Kim introduced HB 1500 earlier this year, which would increase Pennsylvania’s Minimum Wage. For more than a decade, Pennsylvania’s minimum wage has been $7.25 per hour. Further, Pennsylvania’s tipped wage has not seen an increase since 1997, when it was set at $2.83 per hour.
On average, a Pennsylvanian who earns minimum wage will earn $15,000 per year. Due to rising costs affecting the nation, workers are unable to pay for basic necessities and are forced to rely on public assistance. These statistics promulgated HB 1500, which has seen divided support across Pennsylvania’s Legislature.
Trajectory of Impact
Should HB 1500 pass in the state Senate, the minimum wage in Pennsylvania will increase to:
- $11.00 per hour effective January 1, 2024;
- $13.00 per hour effective January 1, 2025; and
- $15.00 per hour effective January 1, 2026
Thereafter, beginning January 1, 2027, Pennsylvania’s minimum wage will be tied to adjustments in the Consumer Price Index for All Urban Consumers (CPI-U) for the Pennsylvania, New Jersey, Delaware and Maryland area, if HB 1500 becomes law.
How Does the Increase Impact Employers?
Employers should note that raising minimum wage means that business owners must raise their minimum hourly wage to comply with the law. This does not necessarily mean that all employee wages will increase, however, as this change only affects workers who are paid minimum wage.
What Employers Should Keep in Mind
HB 1500 narrowly passed in the Pennsylvania House of Representatives, with a vote of 103-100. It is unclear whether HB 1500 will gain support in the state Senate and become law.
Though the future is unclear, it is important that employers review their employees’ wages to ensure that they currently comply with Pennsylvania’s Minimum Wage Act of 1968 and that revisions to payroll can and will be made, should HB 1500 pass and increase minimum wage on January 1, 2024.
KingSpry’s Employment Law Group is prepared to help employers of all sizes proactively and responsibly manage their employment and human resources needs. Should you have questions or concerns regarding HB 1500 and the impact the potential minimum wage increase will have on your business, contact our Employment Law team today.
