PRINTER'S NO. 1479
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1045
Session of
2018
INTRODUCED BY HAYWOOD, TARTAGLIONE AND SCHWANK, FEBRUARY 9, 2018
REFERRED TO LABOR AND INDUSTRY, FEBRUARY 9, 2018
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 definitions; providing for
tipped employees; and further providing for preemption.
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, are
amended and the section is amended by adding a subsection 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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
under section 9.
"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
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
20180SB1045PN1479 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
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
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. The act is amended by adding a section to read:
Section 4.1. Tipped Employes.--(a) An employer shall pay a
tipped employe wages for all hours worked at a rate of not less
than:
(1) Twelve dollars ($12.00) an hour beginning January 1,
2024.
(2) Thirteen dollars ($13.00) an hour beginning January 1,
2025.
(3) Fourteen dollars ($14.00) an hour beginning January 1,
2026.
(4) Beginning January 1, 2027, the minimum wage under
20180SB1045PN1479 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
section 4 or fifteen dollars ($15.00), whichever is greater.
(5) Beginning January 1, 2028, 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 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 (5ยข), 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.
(a.1) A municipality may enact an ordinance which requires
an employer to pay each of his or her employes wages for all
hours worked at a rate higher than the rate imposed under
subsection (a). A copy of an ordinance adopted by a municipality
under this subsection shall be submitted to the department.
(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).
(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
20180SB1045PN1479 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
pooling of gratuities among tipped employes.
(3) If a gratuity is added, either by the employer or
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 3. Section 14.1 of the act is amended to read:
Section 14.1. Preemption.--(a) Except as set forth in
subsection (b) or section 4.1(a.1), 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 4. The amendment or addition of section 14.1(a.1) of
the act shall apply to contracts entered into or renewed on or
after the effective date of this section.
Section 5. This act shall take effect as follows:
(1) The amendment of the definition of "wage" 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.
20180SB1045PN1479 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25