On July 24, 2009 the Pennsylvania minimum wage increased by 10 cents, from $7.15 per hour to $7.25 per hour.
Many employers wonder why all the fuss about such a small amount of money. However, under state law the Pennsylvania minimum wage cannot be less than the federal minimum wage. When the federal rate increases by 70 cents from $6.55 to $7.25 per hour later this month, by statute, the Pennsylvania minimum wage must increase, as well.
The last increase to the Pennsylvania minimum wage was to $7.15 per hour on January 1, 2007.
Each time the federal or Pennsylvania minimum wage increases, employers must display updated labor law posters.
Both the Pennsylvania minimum wage and the federal minimum wage increased in 2007 from $5.15 to $5.85 and again in 2008 from $5.85 to $6.55.
The Pennsylvania minimum wage for tipped employees remains at $2.83 per hour. However, if the employee does not average $4.42 per hour in tips over the payroll period, the employer must pay the difference.
The new federal minimum wage essentially eliminates the Pennsylvania training wage. Under state law, an employee under the age of 20 could be paid a lower “training wage” equal to the federal minimum wage during the first 60 days of employment. However, under the current law, the federal and state minimum wage are the same and employers must pay the minimum wage from the first day of employment.
Though this increase may create hardship for employers in this struggling economy, 2009 is the last scheduled increase for the federal minimum rate. At this time, no increase is scheduled for 2010.
Pennsylvania state minimum wage covers the smaller employers. The Pennsylvania minimum wage law is enforced by the Bureau of Labor Law Compliance, a part of the Pennsylvania Department of Labor and Industry.
The remaining companies are covered by the (more…)
The Pennsylvania minimum wage law also accounts for students, people with disabilities and so called learners. But an employer, in order to be able to pay these folks a special Pennsylvania minimum wage, must contact their state Department of Labor and ask for a special permit to do so. For students who are under the age of 20, however, Pennsylvania employers do not have to request permission to pay them less.
The Pennsylvania minimum wage labor law has a special rate for these students, which is $5.15 per hour. This special rate, however, only lasts for the first full 60 days of employment for the student. After that, then the Pennsylvania employer must pay their Pennsylvania student the regular Pennsylvania minimum wage. (Sorry for the ton of “Pennsylvania” references here; I am from the Keystone State, and some times my pride kicks in!)
As with many minimum wage laws that allow employers to pay students and trainees a special lower minimum wage, the Pennsylvania law does not permit employers to continually fire employees when they pass heir 60 day limit and then replace them with newbies, thereby always being able to pay the lower student minimum wage to a continual influx of new recruits. In other words, Pennsylvania employers cannot “displace” current employees to make room for student employees who can make less money. (Of course, I would not expect any of the fine honest employees who are my loyal readers to be pulling any treachery like that.)
What is the point of all of this review of the Pennsylvania minimum wage? Mainly, to be honest, it is meant for many of my readers who are new to this blog. But it is also for my regular readers out there, to keep them in tune with the upcoming Pennsylvania minimum wage change, and to remind them of the PNC survey study. That showed that the upcoming federal minimum wage change won’t much affect employers in the Keystone State because they already pay more.
Look, Pennsylvania employers. You should be all prepared for what I am about to tell you. It should come as no news to you because you have been posting this very same information on the walls of your work site break rooms, near your lunch rooms and in the hallways near your time clocks. This information is already on the latest Pennsylvania minimum wage posters, is what I am saying.
Your friendly Pennsylvania minimum wage is about to change. As of July 1, 2007, the Pennsylvania minimum wage will change from its current rate (where it has been since January 1, 2007) of $6.25 per hour to $7.15 per hour. Yes, all of this information should already be in a conspicuous place in your work site, each and every one of them. If not, I would highly suggest your Pennsylvania employers out there to purchase yourself a Pennsylvania minimum wage labor law poster as soon as possible.
What won’t change, it does not seem, with the change in the regular Pennsylvania minimum wage is the tipped employee minimum wage. As it stands now, the Pennsylvania minimum wage for tipped employees is at $2.83 per hour (with the definition of tipped employee being somebody who makes at least $30 per month tips). As far as I can tell from the Pennsylvania labor laws and from my sources on the topic, come July when the regular employee minimum wage changes, te tipped employee minimum wage will stay the same in the state.
Pennsylvania minimum wage law also accounts for smaller employers in the state and allows them to pay a lower rate. That rate is currently $5.65 per hour, but it too will increase to $6.65 per hour on July 1, and then $7.15 per hour come July 1, 2008. The cut off for “smaller” employers is having ten or less full time employees.
It isn’t because the federal minimum wage impact is not looking like it will become a reality. Maybe back when this survey was done earlier in the spring it did not appear that the federal minimum wage will pass. But even then, it was always considered by experts to be a matter of not if, but when. And now that the House and the Senate leaders have come to a compromise over how big of a tax break package to give to small and middle sized employers—at about $4.8 billion—it looks even more likely that the federal minimum wage will pass. It is now not a matter of if or when—but how soon.
Instead, the PNC survey authors suggest the same reason for the lack of concern by Pennsylvania employers as the reason they gave for small and midsize employers in the states of Maryland and New Jersey, and in Washington DC. The reason—most PA employers are already paying more than what the federal minimum wage will become to their lowest paid employees. The Pennsylvania minimum wage, after all, is set now at $6.25 per hour. The new federal minimum wage, as proposed in the current bill, will not surpass that level—at $6.50 per hour—until middle to late 2008.
And about 79 percent—or four out of five employers just about—in the state of Pennsylvania already pay higher than the current Pennsylvania minimum wage to their employers. On top of that, the PA minimum wage will go up again this July 1 to $7.15—a figure that the federal minimum wage will not surpass until mid to late 2009, according to the current version of the federal minimum wage bill.
Interesting enough, PA employers do say they have trouble finding employees to pay any wage—as many as one in three employers survey said they find it harder than it was six months ago.
Now, my loyal readers, in Pennsylvania and otherwise, I know the question that is forming on your lips—how will the state minimum wage play into this training and vocation program set up by Gov. Rendell in Pennsylvania? Well, that is a good question, and one I think I know part of the answer for.
Remember, one of the issues in Arizona is that the state used to have an exemption for the Arizona minimum wage for its disabled workers. And that is because there wasn’t a true Arizona minimum wage law per se before 2007. It used to be that Arizona employers would just have to follow the wage and hours and the federal minimum wage contained in the Fair Labor Standards Act.
Well, in the Fair Labor Standards Act, there is an exclusion in there for disabled workers, that allows employers to pay these disabled workers a fair rate for the productivity given to them by their disabled workers. So we can translate this situation to Pennsylvania, even though it does not any longer hold true for the state of Arizona.
In Pennsylvania, then, any employer who is liable to follow the Fair Labor Standards Act must follow the federal minimum wage labor law rules. Why? Well, the Pennsylvania minimum wage is $5.15 per hour, the same as the federal minimum wage at the moment, so the Pennsylvania minimum wage does not trump the federal minimum wage.
So employers who are large (and bring in more than $500,000 in revenue per year) or who operate on an interstate basis, all are liable to follow the Fair Labor Standards Act, among some others. That means that they would not have to pay the disabled workers coming out this new Rendell program the full minimum wage, unless Gov. Rendell’s law specifically calls for it.