Tipped employees in Pennsylvania will soon have to make more than four times as much money in tips to be paid below the state’s minimum wage, under a new regulation that adjusts for 45 years of inflation.
Monday's unanimous vote by the five-member Independent Regulatory Review Commission approved a proposal by Gov. Tom Wolf's administration. The new rule could take effect in the coming months and primarily affects restaurant employees.
Currently, employers can pay tipped employees less the state's minimum wage of $7.25 an hour, to as low as $2.83 an hour if they make at least $30 a month in tips.
Under the newly approved rule, that monthly tip threshold will rise to $135 a month to adjust for inflation going back to 1977.
Wolf's administration calculated that there are between 93,000 and 160,000 workers in Pennsylvania who are paid a tipped minimum wage of below $7.25 an hour.
The rule also updates Pennsylvania regulations to follow federal guidance on who employers can classify as a tipped employee.
Under the new rule, an employee must spend at least 80% of their time on tipped work to be classified as a tipped employee and paid below the $7.25 an hour threshold.
Wolf, a Democrat, has sought unsuccessfully in the Republican-controlled Legislature to raise the state's rock-bottom minimum wage for both tipped and untipped employees.
