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 and for minimum wages; providing for eligibility and coverage; further providing for exemptions, for duty of employer, for enforcement and rules and regulations and for civil actions; and repealing provisions relating to preemption.

PRINTER'S NO. 2444
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 23
Session of
2025
INTRODUCED BY RABB, HILL-EVANS, WEBSTER, DOUGHERTY AND GREEN,
OCTOBER 9, 2025
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, OCTOBER 10, 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 and for minimum
wages; providing for eligibility and coverage; further
providing for exemptions, for duty of employer, for
enforcement and rules and regulations and for civil actions;
and repealing provisions relating to preemption.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 3(d), (f), (h) 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
subsections 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
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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; 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
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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.] In determining compliance with
section 4, gratuities shall be in addition to wages and may not
be credited against the wage required under section 4. An
employer may not, directly or indirectly, take, keep or divert
any part of an employe's gratuities. Where a gratuity is added
to a charge by the establishment or the customer, the gratuity
shall be the sole property of the employe who performed the
service. A tip pool may be permitted only among employes who
customarily receive gratuities and may not include an employer,
manager or supervisor. Any gratuities paid by credit card shall
be remitted in full to the employe, without deduction for
processing or other fees, no later than the next regular payday.
* * *
[(f) "Employe" includes to suffer or to permit to work.]
* * *
(h) "Employe" includes any individual [employed by an
employer.] who is suffered or permitted to work for
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remuneration. The term includes, without limitation, a domestic
worker, agricultural worker, incarcerated worker participating
in a work program, worker with a disability, minor or individual
who performs labor or services through a marketplace platform or
similar arrangement, regardless of job title or contractual
designation.
(i) "Gratuities" means [voluntary, monetary contributions
received by an employe from a guest, patron or customer for
services rendered.] a voluntary monetary amount paid by a guest,
patron or customer to an employe for services rendered.
(j) "Domestic worker" means an individual who performs
services of a household nature in or for a private dwelling,
including housekeeping, cleaning, cooking, home care or child
care.
(k) "Agricultural worker" means an individual engaged in
agricultural production, including planting, cultivating,
harvesting or caring for livestock.
(l) "Marketplace platform" means a person or entity
operating a digital platform or application that facilitates the
provision of services to end users by individuals who receive
remuneration for the services.
(m) "Marketplace contractor" means an individual who
provides services to end users through a marketplace platform
for remuneration.
(n) "Worker with a disability" means an individual whose
earning or productive capacity is impaired by a physical or
mental condition.
Section 2. Section 4(e) of the act is amended and subsection
(a) is amended by adding paragraphs to read:
Section 4. Minimum Wages.--Except as may otherwise be
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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) Fifteen dollars ($15) an hour beginning July 1, 2026.
(10) Beginning July 1, 2027, and each July 1 thereafter, the
minimum wage shall increase by one dollar ($1) an hour from the
previous year until the hourly rate for each employe reaches a
living wage for a household of two adults and two children based
on the average cost of living, by county, as determined by the
department. The minimum wage shall be automatically indexed to
the Consumer Price Index for All Urban Consumers (CPI-U) for the
Pennsylvania, New Jersey, Delaware and Maryland area upon
meeting or exceeding the living wage threshold in the prior
fiscal year.
* * *
(e) In lieu of the minimum wage prescribed in subsection (a)
[and section 5(c)] and notwithstanding subsections (b) and (d),
an employer may, during the first sixty calendar days when an
employe under the age of twenty years is initially employed, pay
the employe training wages at a rate of not less than the
minimum wage set forth in section 6(a) of the Fair Labor
Standards Act (29 U.S.C. § 206(a)). A person employed at the
training wage under this subsection shall be informed of the
amount of the training wage and the right to receive the full
minimum wage, or a higher wage, upon completion of the training
period. No employer may take any action to displace existing
employes, including partial displacements such as reduction in
the hours, wages or employment benefits of existing employes,
for purposes of hiring individuals at the training wage
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authorized by this subsection.
Section 3. The act is amended by adding a section to read:
Section 4.1. Eligibility and Coverage.--(a) Notwithstanding
the Fair Labor Standards Act of 1938 (52 Stat. 1060, 29 U.S.C. §
201 et seq.), the minimum wage under this act shall apply to all
classes of workers, including domestic workers, agricultural
workers, incarcerated workers participating in work programs,
workers with a disability, minors and marketplace contractors.
(b) The sub-minimum cash wage of two dollars eighty-three
cents ($2.83) for tipped employes is abolished.
Section 4. Sections 5(a)(1) and (2) and (c), 8, 9 and 13 of
the act are amended to read:
Section 5. Exemptions.--(a) Employment in the following
classifications shall be exempt from both the minimum wage and
overtime provisions of this act:
[(1) Labor on a farm;
(2) Domestic services in or about the private home of the
employer;]
* * *
[(c) (1) Notwithstanding the provisions of section 4(a)(7)
and (8), an employer unless otherwise exempt from the minimum
wage provisions of section 4(a)(6) whose employe complement is
composed of the equivalent of ten or less full-time employes to
be calculated on a forty-hour workweek shall pay:
(i) Five dollars sixty-five cents ($5.65) an hour beginning
January 1, 2007.
(ii) Six dollars sixty-five cents ($6.65) an hour beginning
July 1, 2007.
(2) Such employer shall pay the full amount of the minimum
wage under section 4(a)(8) beginning July 1, 2008.]
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Section 8. Duty of Employer.--Every employer of employes
shall keep a true and accurate record of the hours worked by
each employe and the wages paid to each, and shall furnish to
the secretary or his or her duly authorized representative, upon
demand, a sworn statement of the same. Such records shall be
open to inspection by any duly authorized representative of the
secretary at any reasonable time and shall be preserved for a
period of three years. Every employer subject to this act shall
keep a summary of this act and any regulations issued thereunder
applicable to him or her, posted in a conspicuous place where
employes normally pass and can read it. Employers shall, upon
request, be furnished copies of such summaries without charge.
Employers shall permit any duly authorized representative of the
secretary to interrogate any employe in the place of employment
and during work hours with respect to the wages paid to and the
hours worked by such employe or other employes. In addition, an
employer shall provide each employe, on each regular payday, an
itemized statement of hours worked, rates of pay, gross wages,
the amount and nature of each deduction and the amount of any
gratuities paid, including gratuities paid by credit card.
Gratuities paid by credit card shall be paid in full to the
employe without deduction for processing or other fees no later
than the next regular payday. An employer may not require an
employe to surrender or credit any gratuities toward the wage
required under section 4.
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
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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]
regulation of gratuities, including tip pooling and payment
practices consistent with section 3; or allowances for such
other special conditions or circumstances which may be
incidental to a particular employer-employe relationship.
Regulations may not authorize crediting gratuities against the
wage required under section 4.
Section 13. Civil Actions.--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
may recover in a civil action the full amount of such minimum
wage less any amount actually paid to the worker 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 to work for less than such minimum
wage shall be no defense to such action. 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,
the secretary may take an assignment of such wage claim, in
trust for the assigning worker 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
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may be allowed by the court. An employe may also recover, in a
civil action, any gratuities the employer unlawfully kept,
diverted or failed to remit under section 3, together with costs
and such reasonable attorney fees as may be allowed by the
court.
Section 5. Section 14.1 of the act 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 6. This act shall take effect in 60 days.
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