An Act amending the act of January 17, 1968 (P.L.11, No.5), known as The Minimum Wage Act of 1968, further providing for definitions, for minimum wages and for preemption.

PRINTER'S NO. 1241
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1150
Session of
2025
INTRODUCED BY GREEN, KHAN, MADDEN, PIELLI, HOHENSTEIN, MADSEN,
OTTEN, McNEILL, WAXMAN, PROBST, GIRAL, BOYD, RABB, MAYES,
KAZEEM, HILL-EVANS, SANCHEZ, HADDOCK, MALAGARI, FIEDLER,
CEPEDA-FREYTIZ, RIVERA, DONAHUE, KENYATTA, FREEMAN, CIRESI,
WARREN, SHUSTERMAN, PROKOPIAK, WEBSTER, CERRATO, SCOTT,
CURRY, DALEY, POWELL, KINKEAD, T. DAVIS, ISAACSON, O'MARA,
K.HARRIS, DOUGHERTY, SCHLOSSBERG, HANBIDGE, N. NELSON,
NEILSON AND BELLMON, APRIL 3, 2025
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, APRIL 3, 2025
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, for minimum
wages and for preemption.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 3(d), 4(a) and 14.1 of the act of
January 17, 1968 (P.L.11, No.5), known as The Minimum Wage Act
of 1968, are amended 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
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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.
"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;] of five dollars ($5.00) an hour after June 30,
2025, six dollars and twenty-five cents ($6.25) an hour after
December 31, 2025, seven dollars and fifty cents ($7.50) an hour
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after June 30, 2026, eight dollars and seventy-five cents
($8.75) an hour after December 31, 2026, ten dollars ($10.00) an
hour after June 30, 2027, eleven dollars and twenty-five cents
($11.25) an hour after December 31, 2027, twelve dollars and
fifty cents ($12.50) an hour after June 30, 2028, and thirteen
dollars and seventy-five cents ($13.75) an hour after December
31, 2029, through June 30, 2029; 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
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. Effective July 1, 2029, an employer
is required to pay a tipped employe the full minimum wage in
effect under section 4 of this act. In addition, all gratuities
received by such employe or added to the charge made by the
establishment, either by the management or by the customer,
shall become the property of the employe and shall not be used
by the employer as wages to satisfy the requirement to pay the
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current hourly minimum rate in effect. Nothing in this
definition shall be construed to prohibit the pooling of tips
among employes who customarily and regularly receive tips,
however an employer may not keep any gratuities received by an
employe for any purpose, including allowing managers or
supervisors to keep any portion of an employe's gratuities.
* * *
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:
(1) Two dollars sixty-five cents ($2.65) an hour upon the
effective date of this amendment.
(2) Two dollars ninety cents ($2.90) an hour during the year
beginning January 1, 1979.
(3) Three dollars ten cents ($3.10) an hour during the year
beginning January 1, 1980.
(4) Three dollars thirty-five cents ($3.35) an hour after
December 31, 1980.
(5) Three dollars seventy cents ($3.70) an hour beginning
February 1, 1989.
(6) Five dollars fifteen cents ($5.15) an hour beginning
September 1, 1997.
(7) Six dollars twenty-five cents ($6.25) an hour beginning
January 1, 2007.
(8) Seven dollars fifteen cents ($7.15) an hour beginning
July 1, 2007.
(9) Fifteen dollars ($15) an hour beginning January 1, 2026.
(10) Beginning January 1, 2027, and each January 1
thereafter, the minimum wage shall be increased by an annual
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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 (5¢), shall be determined by the
secretary. The secretary shall, within ten days following the
determination, transmit a notice of the determination to the
Legislative Reference Bureau for publication in the next
available issue of the Pennsylvania Bulletin.
* * *
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.] Notwithstanding any other provision of law, a
municipality shall be permitted to pass local ordinances or
rules regulating the minimum wage for that municipality. Nothing
in this act shall permit a municipality to pass a wage lower
than the minimum wage as required by the Commonwealth of
Pennsylvania, or that are required under section 4 of this act
and 29 U.S.C. Ch. 8 (relating to fair labor standards).
(b) A municipality that adopts a minimum wage ordinance or
other measure may adopt provisions for the local enforcement of
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the ordinance or measure, including enforcement by private
parties. Nothing in this section shall preclude the secretary
from enforcing the provisions of this act.
(c) As used in this section, the following words and phrases
shall have the meanings given to them in this subsection unless
the context clearly indicates otherwise:
"Municipality" means a county, city, borough, incorporated
town, township, home rule municipality, optional plan
municipality or optional charter municipality.
Section 2. This act shall take effect as follows:
(1) The amendment of section 3(d) of the act shall take
effect January 1, 2026.
(2) This section shall take effect immediately.
(3) The remainder of this act shall take effect in 60
days.
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