PRINTER'S NO. 1492
No. 1090 Session of 2006
INTRODUCED BY TARTAGLIONE, HUGHES, COSTA, FERLO, FONTANA, FUMO,
KASUNIC, KITCHEN, LAVALLE, LOGAN, MELLOW, MUSTO, O'PAKE,
STACK, STOUT, WASHINGTON, A. WILLIAMS, C. WILLIAMS, WOZNIAK,
BOSCOLA, BROWNE, CONTI, PILEGGI, RAFFERTY AND TOMLINSON,
JANUARY 31, 2006
REFERRED TO LABOR AND INDUSTRY, JANUARY 31, 2006
AN ACT
1 Amending the act of January 17, 1968 (P.L.11, No.5), entitled
2 "An act establishing a fixed minimum wage and overtime rates
3 for employes, with certain exceptions; providing for minimum
4 rates for learners and apprentices; creating a Minimum Wage
5 Advisory Board and defining its powers and duties; conferring
6 powers and imposing duties upon the Department of Labor and
7 Industry; imposing duties on employers; and providing
8 penalties," giving effect to Federal changes in wage rates;
9 and making editorial changes.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Section 3 of the act of January 17, 1968 (P.L.11,
13 No.5), known as The Minimum Wage Act of 1968, amended December
14 15, 1988 (P.L.1232, No.150), and December 21, 1998 (P.L.1290,
15 No.168), is amended to read:
16 Section 3. Definitions.--As used in this act:
17 (a) "Secretary" means the Secretary of Labor and Industry.
18 (b) "Department" means the Department of Labor and Industry.
19 (c) "Board" means the Minimum Wage Advisory Board created by
20 this act.
1 (d) "Wages" mean compensation due to any employe by reason
2 of his or her employment, payable in legal tender of the United
3 States or checks on banks convertible into cash on demand at
4 full face value, subject to such deductions, charges or
5 allowances as may be permitted by regulations of the secretary
6 under section 9.
7 "Wage" paid to any employe includes the reasonable cost, as
8 determined by the secretary, to the employer for furnishing such
9 employe with board, lodging, or other facilities, if such board,
10 lodging, or other facilities are customarily furnished by such
11 employer to his or her employes: Provided, That the cost of
12 board, lodging, or other facilities shall not be included as a
13 part of the wage paid to any employe to the extent it is
14 excluded therefrom under the terms of a bona fide collective-
15 bargaining agreement applicable to the particular employe:
16 Provided, further, That the secretary is authorized to determine
17 the fair value of such board, lodging, or other facilities for
18 defined classes of employes and in defined areas, based on
19 average cost to the employer or to groups of employers similarly
20 situated, or average value to groups of employes, or other
21 appropriate measures of fair value. Such evaluations, where
22 applicable and pertinent, shall be used in lieu of actual
23 measure of cost in determining the wage paid to any employe.
24 In determining the hourly wage an employer is required to pay
25 a tipped employe, the amount paid such employe by his or her
26 employer shall be an amount equal to: (i) the cash wage paid the
27 employe which for the purposes of the determination shall be not
28 less than the cash wage required to be paid the employe on the
29 date immediately prior to the effective date of this
30 subparagraph; and (ii) an additional amount on account of the
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1 tips received by the employe which is equal to the difference
2 between the wage specified in subparagraph (i) and the wage in
3 effect under section 4 of this act. The additional amount on
4 account of tips may not exceed the value of tips actually
5 received by the employe. The previous sentence shall not apply
6 with respect to any tipped employe unless:
7 (1) Such employe has been informed by the employer of the
8 provisions of this subsection;
9 (2) All tips received by such employe have been retained by
10 the employe and shall not be surrendered to the employer to be
11 used as wages to satisfy the requirement to pay the current
12 hourly minimum rate in effect; where the gratuity is added to
13 the charge made by the establishment, either by the management,
14 or by the customer, the gratuity shall become the property of
15 the employe; except that this subsection shall not be construed
16 to prohibit the pooling of tips among employes who customarily
17 and regularly receive tips.
18 (e) "Occupation" means any industry, trade, business,
19 service, or employment or class or group thereof in which
20 individuals are gainfully employed.
21 (f) "Employe" includes to suffer or to permit to work.
22 (g) "Employer" includes any individual, partnership,
23 association, corporation, business trust, or any person or group
24 of persons acting, directly or indirectly, in the interest of an
25 employer in relation to any employe.
26 (h) "Employe" includes any individual employed by an
27 employer.
28 (i) "Gratuities" means voluntary, monetary contributions
29 received by an employe from a guest, patron or customer for
30 services rendered.
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1 Section 2. Section 4 of the act, amended December 10, 1974
2 (P.L.916, No.303), July 1, 1978 (P.L.735, No.135), December 15,
3 1988 (P.L.1232, No.150), and July 9, 1990 (P.L.348, No.79), is
4 amended to read:
5 Section 4. Minimum Wages.--Except as may otherwise be
6 provided under this act:
7 (a) Every employer shall pay to each of his or her employes
8 wages for all hours worked at a rate of not less than:
9 (1) Two dollars sixty-five cents ($2.65) an hour upon the
10 effective date of this amendment.
11 (2) Two dollars ninety cents ($2.90) an hour during the year
12 beginning January 1, 1979.
13 (3) Three dollars ten cents ($3.10) an hour during the year
14 beginning January 1, 1980.
15 (4) Three dollars thirty-five cents ($3.35) an hour after
16 December 31, 1980.
17 (5) Three dollars seventy cents ($3.70) an hour beginning
18 February 1, 1989[, and thereafter].
19 (6) Five dollars fifteen cents ($5.15) an hour beginning
20 September 1, 1997, and thereafter.
21 (a.1) If the minimum wage set forth in the Fair Labor
22 Standards Act of 1938 (52 Stat. 1060, 29 U.S.C. § 201 et seq.)
23 is increased above [three dollars thirty-five cents ($3.35) an
24 hour] the minimum wage required under this section, the minimum
25 wage required under this section shall be increased by the same
26 amounts and effective the same date as the increases under the
27 Fair Labor Standards Act, and the provisions of subsection (a)
28 are suspended to the extent they differ from those set forth
29 under the Fair Labor Standards Act.
30 (b) The secretary, to the extent necessary to prevent
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1 curtailment of employment opportunities, shall by regulations
2 provide for the employment of learners and students, under
3 special certificates at wages lower than the minimum wage
4 applicable under this section, and subject to such limitations
5 as to number, proportion and length of service as the secretary
6 shall prescribe: Provided, That the minimum wage prescribed
7 under this subsection (b) shall not be less than eighty-five
8 percent of the otherwise applicable wage rate in effect under
9 section 4. A special certificate issued under this subsection
10 shall provide that for six or less students for whom it is
11 issued shall, except during vacation periods, be employed on a
12 part-time basis and not in excess of twenty hours in any
13 workweek at a sub-minimum rate.
14 In the case of an employer who intends to employ seven or
15 more students, at a sub-minimum rate, the secretary may issue a
16 special certificate only if the employer certifies to the
17 secretary that employment of such students will not create a
18 substantial probability of reducing the full-time employment
19 opportunities for other workers.
20 (c) Employes shall be paid for overtime not less than one
21 and one-half times the employe's regular rate as prescribed in
22 regulations promulgated by the secretary: Provided, That
23 students employed in seasonal occupations as defined and
24 delimited by regulations promulgated by the secretary may, by
25 such regulations, be excluded from the overtime provisions of
26 this act: And provided further, That the secretary shall
27 promulgate regulations with respect to overtime subject to the
28 limitations that no pay for overtime in addition to the regular
29 rate shall be required except for hours in excess of forty hours
30 in a workweek.
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1 (d) An employe whose earning capacity is impaired by
2 physical or mental deficiency or injury may be paid less than
3 the applicable minimum wage if either a license specifying a
4 wage rate commensurate with the employe's productive capacity
5 has been obtained by the employer from the secretary or a
6 Federal certificate is obtained under section 14(c) of the Fair
7 Labor Standards Act of 1938 (52 Stat. 1060, 29 U.S.C. § 201 et
8 seq.). A license obtained from the secretary shall be granted
9 only upon joint application of employer and employe.
10 Section 3. Section 5 of the act, amended December 10, 1974
11 (P.L.916, No.303), July 1, 1978 (P.L.735, No.135), December 15,
12 1988 (P.L.1232, No.150), and July 9, 1990 (P.L.348, No.79), is
13 amended to read:
14 Section 5. Exemptions.--(a) Employment in the following
15 classifications shall be exempt from both the minimum wage and
16 overtime provisions of this act:
17 (1) Labor on a farm;
18 (2) Domestic services in or about the private home of the
19 employer;
20 (3) Delivery of newspapers to the consumer;
21 (4) In connection with the publication of any weekly,
22 semiweekly, or daily newspaper with a circulation of less than
23 four thousand, the major part of which circulation is within the
24 county where published or counties contiguous thereto;
25 (5) In a bona fide executive, administrative, or
26 professional capacity (including any employe employed in the
27 capacity of academic administrative personnel or teacher in
28 elementary or secondary schools) or in the capacity of outside
29 salesman (as such terms are defined and delimited from time to
30 time by regulations of the secretary, except that an employe of
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1 a retail or service establishment shall not be excluded from the
2 definition of employe employed in a bona fide executive or
3 administrative capacity because of the number of hours in his or
4 her workweek which he or she devotes to activities not directly
5 or closely related to the performance of executive
6 administrative activities, if less than forty percent of his or
7 her hours worked in the workweek are devoted to such
8 activities);
9 (6) In the activities of an educational, charitable,
10 religious or nonprofit organization where the employer-employe
11 relationship does not in fact exist or where the services are
12 rendered to such organization gratuitously;
13 (7) In seasonal employment, if the employe is under eighteen
14 years of age, or if a student under twenty-four years of age, by
15 a nonprofit health or welfare agency engaged in activities
16 dealing with handicapped or exceptional children or by a
17 nonprofit day or resident seasonal recreational camp for campers
18 under the age of eighteen years, which operates for a period of
19 less than three months in any one year;
20 (9) In employment by an establishment which is a public
21 amusement or recreational establishment, organized camp, or
22 religious or nonprofit educational conference center, if (i) it
23 does not operate for more than seven months in any calendar
24 year, or (ii) during the preceding calendar year, its average
25 receipts for any six months of such year were not more than
26 thirty-three and one-third percent of its average receipts for
27 the other six months of such year;
28 (10) Golf caddy;
29 (11) In employment as a switchboard operator employed by an
30 independently owned public telephone company which has not more
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1 than seven hundred and fifty stations;
2 (12) Employes not subject to civil service laws who hold
3 elective office or are on the personal staff of such an
4 officeholder, are immediate advisers to him or her, or are
5 appointed by him or her to serve on a policy-making level.
6 (b) Employment in the following classifications shall be
7 exempt from the overtime provisions of this act:
8 (1) Seaman;
9 (2) Any salesman, partsman, or mechanic primarily engaged in
10 selling and servicing automobiles, trailers, trucks, farm
11 implements, or aircraft if employed by a nonmanufacturing
12 establishment primarily engaged in the business of selling such
13 vehicles to ultimate purchasers;
14 (3) Any driver employed by an employer engaged in the
15 business of operating taxicabs;
16 (4) Any employe employed as an announcer, news editor, or
17 chief engineer by a radio or television station, the major
18 studio of which is located (i) in a city or town of one hundred
19 thousand population or less, according to the latest available
20 decennial census figures as compiled by the Bureau of the
21 Census, except where such city or town is part of a standard
22 metropolitan statistical area, as defined and designated by the
23 Bureau of the Budget, which has a total population in excess of
24 one hundred thousand, or (ii) in a city or town of twenty-five
25 thousand population or less, which is part of such an area but
26 is at least forty airline miles from the principal city in such
27 area;
28 (5) Any employe engaged in the processing of maple sap into
29 sugar (other than refined sugar) or syrup;
30 (6) Employment by an establishment which is a motion picture
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1 theatre;
2 (7) Any employe of a motor carrier with respect to whom the
3 Federal Secretary of Transportation has power to establish
4 qualifications and maximum hours of service under 49 U.S.C. §
5 3102(b)(1) and (2) (relating to requirements for qualifications,
6 hours of service, safety and equipment standards).
7 Section 4. Sections 6, 7, 8 and 9 of the act are amended to
8 read:
9 Section 6. Minimum Wage Advisory Board.--(a) There is
10 hereby created in the Department of Labor and Industry a Minimum
11 Wage Advisory Board consisting of nine members to be appointed
12 by the secretary to assist him or her in carrying out his or her
13 duties under this act, and for the purpose of conducting public
14 hearings at the request of the secretary in order to recommend
15 rules and regulations for the occupations covered within this
16 act.
17 (b) Of the nine members, three shall be representatives of
18 an established recognized association of labor organizations,
19 three shall be representatives of an established recognized
20 association of employers and three shall be members from the
21 general public. The Secretary of Labor and Industry or his or
22 her designated representative shall be chairman of the board.
23 (c) Each member of the board shall receive compensation of
24 thirty dollars ($30) per day plus necessary expenses, for each
25 day actually spent in the performance of his or her duties. No
26 employe of the Commonwealth shall receive any additional
27 compensation or expenses on account of his or her services under
28 this act.
29 (d) At least ten days' public notice shall be given in the
30 manner prescribed by the board prior to any public hearing of
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1 the board. Five members of the board shall constitute a quorum.
2 (e) The board shall have the power and duty to:
3 (1) consult with the secretary concerning any matter arising
4 under the administration of this act and advise and assist him
5 or her in carrying out the duties prescribed for him or her by
6 section 8 of this act;
7 (2) conduct public hearings at the request of the secretary
8 in order to develop rules and regulations in accordance with
9 section 9 of this act, in which hearings due process of law
10 shall be observed and any person may appear and be heard or file
11 statements in support of his or her position;
12 (3) the board shall submit its report including
13 recommendations for the promulgation of rules and regulations to
14 the secretary, who shall within thirty days thereafter accept
15 such report or refer it to the board for further consideration
16 and consultation. If the report is referred to the board for
17 further consideration, the secretary shall, in consultation with
18 the board, modify, amend, or otherwise act upon such report
19 within sixty days thereafter. Rules and regulations developed
20 and promulgated hereunder shall be published and any person
21 aggrieved thereby, shall have a right of review as set forth in
22 section 10 of this act.
23 Section 7. Investigations.--(a) The secretary or his or her
24 representative shall have authority to investigate and ascertain
25 the wages of persons employed in any occupation in the
26 Commonwealth; enter and inspect the place of business or
27 employment of any employer of employes in any occupation in the
28 Commonwealth at any reasonable time, for the purpose of
29 examining and inspecting any records of any such employer that
30 in any way relate to wages, hours, or other conditions of
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1 employment of any such employes; copy any or all of such records
2 as [he] the secretary or [his] an authorized representative may
3 deem necessary or appropriate; require from such employer full
4 and accurate statements in writing, at such times as the
5 secretary may deem necessary, of the wages paid to all employes
6 in his or her employment; and interrogate such persons for the
7 purpose of ascertaining whether the provisions of this act and
8 the regulations issued thereunder have been and are being
9 complied with.
10 Section 8. Duty of Employer.--Every employer of employes
11 shall keep a true and accurate record of the hours worked by
12 each employe and the wages paid to each, and shall furnish to
13 the secretary or his or her duly authorized representative, upon
14 demand, a sworn statement of the same. Such records shall be
15 open to inspection by any duly authorized representative of the
16 secretary at any reasonable time and shall be preserved for a
17 period of three years. Every employer subject to this act shall
18 keep a summary of this act and any regulations issued thereunder
19 applicable to him or her, posted in a conspicuous place where
20 employes normally pass and can read it. Employers shall, upon
21 request, be furnished copies of such summaries without charge.
22 Employers shall permit any duly authorized representative of the
23 secretary to interrogate any employe in the place of employment
24 and during work hours with respect to the wages paid to and the
25 hours worked by such employe or other employes.
26 Section 9. Enforcement; Rules and Regulations.--The
27 secretary shall enforce this act. [He] The secretary shall make
28 and, from time to time, revise regulations, with the assistance
29 of the board, when requested by [him] the secretary, which shall
30 be deemed appropriate to carry out the purposes of this act and
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1 to safeguard the minimum wage rates thereby established. Such
2 regulations may include, but are not limited to, regulations
3 defining and governing bona fide executive, administrative, or
4 professional employes and outside [salesmen] sales persons,
5 learners and apprentices, their number, proportion, length of
6 learning period, and other working conditions; handicapped
7 workers; part-time pay; overtime standards; bonuses; allowances
8 for board, lodging, apparel, or other facilities or services
9 customarily furnished by employers to employes; allowances for
10 gratuities; or allowances for such other special conditions or
11 circumstances which may be incidental to a particular employer-
12 employe relationship.
13 Section 5. Section 12 of the act, amended December 10, 1974
14 (P.L.916, No.303), is amended to read:
15 Section 12. Penalties.--(a) Any employer and his or her
16 agent, or the officer or agent of any corporation, who
17 discharges or in any other manner discriminates against any
18 employe because such employe has testified or is about to
19 testify before the secretary or his or her representative in any
20 investigation or proceeding under or related to this act, or
21 because such employer believes that said employe may so testify
22 shall, upon conviction thereof in a summary proceeding, be
23 sentenced to pay a fine of not less than five hundred dollars
24 ($500) nor more than one thousand dollars ($1,000), and in
25 default of the payment of such fine and costs, shall be
26 sentenced to imprisonment for not less than ten days nor more
27 than ninety days.
28 (b) Any employer or the officer or agent of any corporation
29 who pays or agrees to pay any employe less than the rates
30 applicable to such employe under this act shall, upon conviction
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1 thereof in a summary proceeding, be sentenced to pay a fine of
2 not less than seventy-five dollars ($75) nor more than three
3 hundred dollars ($300) or to undergo imprisonment of not less
4 than ten nor more than sixty days, or both. Each week in which
5 such employe is paid less than the rate applicable to him or her
6 under this act and for each employe who is paid less than the
7 prescribed rate, a separate offense shall be deemed to occur.
8 Any agreement between the employer and the employe to work for
9 less than the applicable wage rate shall be no defense to action
10 by the Commonwealth under this section.
11 (c) Any employer or the officer or agent of any corporation
12 who violates any other provision of this act or of any
13 regulation issued thereunder shall, upon conviction thereof in a
14 summary proceeding, be sentenced to pay a fine of not less than
15 one hundred dollars ($100) nor more than five hundred dollars
16 ($500), and each day of such failure to comply with this act or
17 regulation, shall constitute a separate offense.
18 Section 6. This act shall take effect in 60 days.
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