Recent changes to Pennsylvania’s wage and hour laws have significant implications for employers. Staying informed about these updates is crucial for ensuring compliance and avoiding potential litigation. At Leeson & Leeson, our Bethlehem employment lawyers understand these key changes and their impact on employment practices in Pennsylvania.
Minimum Wage and Overtime Updates
One of the most notable changes is the update to the state’s minimum wage and overtime regulations. Although Pennsylvania’s minimum wage remains at the federal level of $7.25 per hour, there have been efforts to raise it. Employers should stay vigilant for any future legislative changes that could impact wage requirements.
In terms of overtime, the Pennsylvania Department of Labor & Industry revised the Minimum Wage Act regulations in 2020, significantly increasing the salary threshold for overtime exemption. The new rules set the salary threshold at $684 per week ($35,568 annually), aligning with the federal standard. This change means that more employees may now qualify for overtime pay, and employers must ensure they are correctly classifying and compensating their workers.
Tip Credit and Tipped Employees
Another critical update concerns tipped employees. Effective August 5, 2022, Pennsylvania implemented new regulations regarding the tip credit. Employers can take a tip credit for employees who earn more than $135 per month in tips, up from the previous threshold of $30. This change aims to ensure that tipped employees receive fair compensation and are not unduly reliant on tips to meet the minimum wage requirement.
Additionally, the regulations clarify that service charges, which are mandatory fees added to bills, cannot be counted as tips. Employers must distinguish between service charges and tips and ensure that tips are distributed directly to employees.
Wage Theft Prevention
Pennsylvania has also taken steps to address wage theft, a significant concern for both employees and employers. The Wage Payment and Collection Law (WPCL) has been strengthened to provide greater protections for workers. Employers must now provide detailed pay statements, including the number of hours worked, the rate of pay, and any deductions. Failure to comply with these requirements can result in penalties and increased scrutiny from regulatory authorities.
Impact on Employment Litigation
These updates have a direct impact on employment litigation. Employers who fail to comply with the new regulations may face lawsuits for unpaid wages, misclassification of employees, and wage theft. The increase in the salary threshold for overtime exemption means that more employees may be entitled to overtime pay, leading to potential claims if employers do not adjust their payroll practices accordingly.
The changes to the tip credit regulations also necessitate a careful review of compensation structures for tipped employees. Employers must ensure they are meeting the new requirements and accurately distinguishing between tips and service charges. Failure to do so can result in legal challenges and financial penalties.
The enhanced wage theft prevention measures increase the likelihood of litigation if employers do not provide compliant pay statements. Detailed documentation and transparency in wage payment are crucial to mitigating the risk of disputes and demonstrating compliance with the law.
Seek Legal Advice
For employers in Bethlehem, Pennsylvania, seeking guidance on navigating these changes, the experienced attorneys at Leeson & Leeson are here to help. We provide comprehensive legal support to ensure compliance with state and federal wage and hour laws, helping you protect your business and your employees. Contact us today for a consultation.