Last fall, Governor Tom Wolf’s administration proposed a regulation that would require tipped employees to earn at least $135 a month in tips before their employer is permitted to pay the $2.83 per hour tipped rate, rather than state’s minimum wage of $7.25 an hour.
At present, Pennsylvania employers can pay tipped employees less than the state minimum wage if they make at least $30 a month in tips.
On March 21, 2022, Pennsylvania’s Independent Regulatory Review Commission (IRRC) approved Governor Wolf’s regulation. The IRRC justified its approval, finding the new threshold necessary to reflect inflation over the past four decades. The $30 tip threshold went into effect in 1977.
The regulation also redefines how Pennsylvania classifies who is a tipped employee. A tipped employee will be an employee who spends 80% of their time on tipped work and who is paid below the $7.25 minimum wage amount. This tracks federal guidance.
Once the IRRC approves the regulation, it will be submitted to the Pennsylvania Attorney General for legal review. If the Attorney General approves it, the regulation will take effect 90 days after being posted in the Pennsylvania Bulletin.
