Regular Session 2015-2016 House Bill 0250 P.N. 0499

PRINTER'S NO. 499

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

250

Session of

2015

INTRODUCED BY KIM, DERMODY, HANNA, FRANKEL, YOUNGBLOOD, GOODMAN,

STURLA, M. DALEY, BOYLE, THOMAS, HARKINS, DONATUCCI, GAINEY,

SAMUELSON, GERGELY, SCHLOSSBERG, SCHWEYER, O'BRIEN, FREEMAN,

DeLUCA, BISHOP, C. PARKER, DEAN, DEASY, P. DALEY, PASHINSKI,

D. COSTA, KINSEY, CARROLL, SCHREIBER, SIMS, GIBBONS,

W. KELLER, BROWNLEE, V. BROWN, McCARTER, MARKOSEK, DAVIS,

SNYDER, COHEN, BIZZARRO, FARINA, KIRKLAND, DAVIDSON, CRUZ,

McNEILL, BRIGGS, P. COSTA, J. HARRIS, CALTAGIRONE, SABATINA,

READSHAW, SANTARSIERO, ROEBUCK, GALLOWAY, FABRIZIO, WATERS,

MAHONEY, BRADFORD, D. MILLER, DeLISSIO, FLYNN, WHEATLEY,

EVANS, ACOSTA, RAVENSTAHL AND KORTZ, FEBRUARY 12, 2015

REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, FEBRUARY 12, 2015

AN ACT

Amending the act of January 17, 1968 (P.L.11, No.5), entitled

"An act establishing a fixed minimum wage and overtime rates

for employes, with certain exceptions; providing for minimum

rates for learners and apprentices; creating a Minimum Wage

Advisory Board and defining its powers and duties; conferring

powers and imposing duties upon the Department of Labor and

Industry; imposing duties on employers; and providing

penalties," further providing for the definitions of "wages"

and "gratuities" and providing for the definition of "tipped

employe"; further providing for minimum wage rates; providing

for tipped employees; and further providing for minimum wage

advisory board, for enforcement and rules and regulations,

for penalties, for civil actions and for preemption; and

making an editorial change.

The General Assembly declares:

(1) The Federal minimum wage was set at $7.25 per hour

in 2009. The real value of the minimum wage has generally

declined since 1968 and with it the buying power of minimum-

wage workers.

(2) Nearly 14% of Pennsylvanians, approximately

1,800,000 people, lived in poverty during 2012, according to

the United States Census Bureau.

(3) At a $7.25 rate, a minimum-wage worker, working 40

hours a week for 52 weeks a year, earns $15,080 annually

which is below the 2013 Federal Poverty Level of $19,530 for

a family of three.

(4) The absence of a fair minimum wage results in the

depression of wages by some employers and constitutes a

serious form of unfair competition against other employers,

reduces the purchasing power of the workers and threatens the

stability of the economy.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 3(d) and (i) of the act of January 17,

1968 (P.L.11, No.5), known as The Minimum Wage Act of 1968,

amended July 9, 2006 (P.L.1077, No.112), are amended and the

section is amended by adding a definition to read:

Section 3. Definitions.--As used in this act:

* * *

(d) "Wages" mean compensation due to any employe by reason

of his or her employment, payable in legal tender of the United

States or checks on banks convertible into cash on demand at

full face value, subject to such deductions, charges or

allowances as may be permitted by regulations of the secretary

under section [9] 9.1.

"Wage" paid to any employe includes the reasonable cost, as

determined by the secretary, to the employer for furnishing such

employe with board, lodging, or other facilities, if such board,

lodging, or other facilities are customarily furnished by such

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employer to his or her employes: Provided, That the cost of

board, lodging, or other facilities shall not be included as a

part of the wage paid to any employe to the extent it is

excluded therefrom under the terms of a bona fide collective-

bargaining agreement applicable to the particular employe:

Provided, further, That the secretary is authorized to determine

the fair value of such board, lodging, or other facilities for

defined classes of employes and in defined areas, based on

average cost to the employer or to groups of employers similarly

situated, or average value to groups of employes, or other

appropriate measures of fair value. Such evaluations, where

applicable and pertinent, shall be used in lieu of actual

measure of cost in determining the wage paid to any employe.

[In determining the hourly wage an employer is required to

pay a tipped employe, the amount paid such employe by his or her

employer shall be an amount equal to: (i) the cash wage paid the

employe which for the purposes of the determination shall be not

less than the cash wage required to be paid the employe on the

date immediately prior to the effective date of this

subparagraph; and (ii) an additional amount on account of the

tips received by the employe which is equal to the difference

between the wage specified in subparagraph (i) and the wage in

effect under section 4 of this act. The additional amount on

account of tips may not exceed the value of tips actually

received by the employe. The previous sentence shall not apply

with respect to any tipped employe unless:

(1) Such employe has been informed by the employer of the

provisions of this subsection;

(2) All tips received by such employe have been retained by

the employe and shall not be surrendered to the employer to be

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used as wages to satisfy the requirement to pay the current

hourly minimum rate in effect; where the gratuity is added to

the charge made by the establishment, either by the management,

or by the customer, the gratuity shall become the property of

the employe; except that this subsection shall not be construed

to prohibit the pooling of tips among employes who customarily

and regularly receive tips.]

* * *

(i) ["Gratuities"] "Gratuity" or "tip" means a voluntary,

monetary [contributions] contribution received by an employe

from a guest, patron or customer for services rendered.

(j) "Tipped employe" means an employe who customarily and

regularly receives a gratuity during the course of the employe's

employment.

Section 2. Section 4(a) of the act is amended by adding

paragraphs to read:

Section 4. Minimum Wages.--Except as may otherwise be

provided under this act:

(a) Every employer shall pay to each of his or her employes

wages for all hours worked at a rate of not less than:

* * *

(9) Nine dollars ($9.00) an hour beginning six months

following the effective date of this paragraph.

(10) Ten dollars ten cents ($10.10) an hour beginning twelve

months after the effective date of this paragraph.

(11) Beginning after December 31, 2016, and for each

succeeding January 1 thereafter, the minimum wage shall be

increased by an annual cost-of-living adjustment calculated by

the secretary using the percentage change in the Consumer Price

Index for All Urban Consumers (CPI-U) for the Pennsylvania, New

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Jersey, Delaware and Maryland area. In calculating the

adjustment, the secretary shall use the most recent twelve-month

period for which figures have been officially reported by the

United States Department of Labor, Bureau of Labor Statistics.

At least sixty days prior to the date the adjustment is due to

take effect, the percentage increase and the minimum wage

amount, rounded to the nearest multiple of five cents (5¢),

shall be determined by the secretary. The secretary shall,

within ten days following the determination, forward a notice of

the determination to the Legislative Reference Bureau for

publication in the next Pennsylvania Bulletin.

* * *

Section 3. The act is amended by adding a section to read:

Section 4.1. Tipped Employes.--(a) An employer shall pay a

tipped employe as follows:

(1) Fifty percent of the wage in effect under section 4(a)

(9), as the wage may be increased under section 4(a)(11).

(2) Seventy-five percent of the wage in effect under section

4(a)(10), as the wage may be increased under section 4(a)(11).

(b) The following shall apply:

(1) Each tipped employe shall be informed in writing by the

employer, no later than twenty days after the effective date of

this section, that the tipped employe will be paid not less than

the appropriate minimum wage under subsection (a) beginning six

months after the effective date of this section.

(2) Each gratuity received by the employe shall be retained

by the employe and shall not be surrendered or paid to the

employer. This paragraph shall not be deemed to prohibit the

pooling of gratuities among tipped employes.

(3) If a gratuity is added, either by the employer or

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manager of the establishment or by the guest, patron or

customer, to the charge to the guest, patron or customer, the

gratuity shall become the property of the tipped employe and

shall not be used by the employer to satisfy the requirement to

pay the wage then in effect.

Section 4. Sections 6(e)(2) and 9 of the act, amended July

9, 2006 (P.L.1077, No.112), are amended to read:

Section 6. Minimum Wage Advisory Board.--* * *

(e) The board shall have the power and duty to:

* * *

(2) conduct public hearings at the request of the secretary

in order to develop rules and regulations in accordance with

section [9] 9.1 of this act, in which hearings due process of

law shall be observed and any person may appear and be heard or

file statements in support of his or her position;

* * *

Section 9. [Enforcement; Rules and Regulations.--The

secretary shall enforce this act. The secretary shall make and,

from time to time, revise regulations, with the assistance of

the board, when requested by the secretary, which shall be

deemed appropriate to carry out the purposes of this act and to

safeguard the minimum wage rates thereby established. Such

regulations may include, but are not limited to, regulations

defining and governing bona fide executive, administrative, or

professional employes and outside salespersons, learners and

apprentices, their number, proportion, length of learning

period, and other working conditions; handicapped workers; part-

time pay; overtime standards; bonuses; allowances for board,

lodging, apparel, or other facilities or services customarily

furnished by employers to employes; allowances for gratuities;

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or allowances for such other special conditions or circumstances

which may be incidental to a particular employer-employe

relationship.] Enforcement.--(a) The secretary shall have the

authority to investigate claims of violations of this act and to

assess administrative penalties under section 12 of this act.

(b) The Attorney General and the district attorneys of the

several counties shall have concurrent jurisdiction to bring an

action for criminal violations of this act under section 12 of

this act. A person charged by the Attorney General shall not

have standing to challenge the authority of the Attorney General

to prosecute the action. If a challenge is made, the challenge

shall be dismissed and no relief shall be available in the

courts of this Commonwealth to the person making the challenge.

Section 5. The act is amended by adding a section to read:

Section 9.1. Rules and Regulations.--(1) The secretary

shall make and revise regulations, with the assistance of the

board, to carry out the purposes of this act and to safeguard

the payment of the wage rates established under this act.

(2) The regulations may include regulations defining and

governing any of the following:

(i) Bona fide executive, administrative or professional

employes and outside salespersons.

(ii) Learners and apprentices and the number, proportion,

length of learning period and other working conditions of

learners and apprentices.

(iii) Handicapped workers.

(iv) Part-time pay.

(v) Overtime standards.

(vi) Bonuses.

(vii) Allowances for apparel, board, lodging or other

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facilities or services customarily furnished by employers to

employes.

(viii) Allowances for gratuities.

(ix) Allowances for other special conditions or

circumstances which may be incidental to a particular employer-

employe relationship.

Section 6. Section 12 of the act, amended July 9, 2006

(P.L.1077, No.112), is amended to read:

Section 12. Penalties.--(a) [Any employer and his or her

agent, or the officer or agent of any corporation,] A person who

discharges or in any other manner discriminates against any

employe [because such employe has] who has filed or submitted a

complaint under this act, cooperated with the Attorney General,

a district attorney, the secretary or the secretary's

representative, submitted evidence, testified or is about to

testify [before the secretary or his or her representative] in

any investigation or proceeding under or related to this act, or

because such [employer] person believes that said employe may

[so testify shall, upon conviction thereof in a summary

proceeding,] take these actions, or has exercised any right

under this act or any regulation implementing its provisions, or

because such employe provided assistance or information to

another employe about this act commits a summary offense and,

upon conviction thereof, shall be sentenced to pay a fine of not

less than [five hundred dollars ($500)] two thousand dollars

($2,000) nor more than [one thousand dollars ($1,000)] five

thousand dollars ($5,000), and in default of the payment of such

fine [and costs], shall be sentenced to imprisonment for not

less than ten days nor more than ninety days. If the secretary

determines that a violation of this subsection has occurred, the

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secretary shall assess a penalty against the person of not less

than two thousand dollars ($2,000) nor more than five thousand

dollars ($5,000).

(b) [Any employer or the officer or agent of any

corporation] A person who pays or agrees to pay any employe less

than the rates applicable to such employe under this act [shall,

upon conviction thereof in a summary proceeding,] commits a

summary offense and, upon conviction thereof, shall be sentenced

to pay a fine of not less than [seventy-five dollars ($75)] one

thousand five hundred dollars ($1,500) nor more than [three

hundred dollars ($300)] three thousand dollars ($3,000) or to

undergo imprisonment of not less than ten nor more than sixty

days, or both. Each week in which such employe is paid less than

the rate applicable to him or her under this act and for each

employe who is paid less than the prescribed rate, a separate

offense shall be deemed to occur. Any agreement between the

employer and the employe to work for less than the applicable

wage rate shall be no defense to an action [by the Commonwealth]

under this section. If the secretary determines that a violation

of this subsection has occurred, the secretary shall assess a

penalty against the person of not less than one thousand five

hundred dollars ($1,500) nor more than three thousand dollars

($3,000) for each week that the violation occurred and for each

employe that is the subject of the violation.

corporation] A person who violates any other provision of this

act or of any regulation [issued thereunder shall, upon

conviction thereof in a summary proceeding,] implementing its

provisions commits a summary offense and, upon conviction

thereof, shall be sentenced to pay a fine of not less than [one

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hundred dollars ($100)] one thousand five hundred dollars

($1,500) nor more than [five hundred dollars ($500)] five

thousand dollars ($5,000), and each day [of such failure to

comply with this act or regulation,] that such violation occurs

shall constitute a separate offense. If the secretary determines

that a violation of any other provision of this act or a

regulation implementing its provisions has occurred, the

secretary shall assess a penalty against the person of not less

than one thousand five hundred dollars ($1,500) nor more than

five thousand dollars ($5,000) for each day such violation

occurs.

Section 7. Section 13 of the act is amended to read:

Section 13. Civil Actions.--(a) If any employe is paid by

his or her employer less than the minimum wages provided by

section 4 of this act or by any regulation issued thereunder,

such [worker] employe may recover in a civil action the full

amount of such minimum wage less any amount actually paid to the

[worker] employe by the employer, together with costs and such

reasonable attorney's fees as may be allowed by the court, and

any agreement between the employer and the [worker] employe to

work for less than such minimum wage shall be no defense to such

action.

(b) At the request of any employe paid less than the minimum

wage to which such employe was entitled under this act and

regulations issued [thereunder] under this act, the secretary

may take an assignment of such wage claim, in trust for the

assigning [worker] employe and may bring any legal action

necessary to collect such claim, and the employer shall be

required to pay the cost and such reasonable attorney's fees as

may be allowed by the court.

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Section 8. Section 14.1 of the act, added July 9, 2006

(P.L.1077, No.112), is repealed:

[Section 14.1. Preemption.--(a) Except as set forth in

subsection (b), this act shall preempt and supersede any local

ordinance or rule concerning the subject matter of this act.

(b) This section does not prohibit local regulation pursuant

to an ordinance which was adopted by a municipality prior to

January 1, 2006, and which remained in effect on January 1,

2006.]

Section 9. This act shall take effect as follows:

(1) The repeal under section 3(d) of the act and the

addition of section 4.1 of the act shall take effect in six

months.

(2) The remainder of this act shall take effect

immediately.

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