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. 951
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 852
Session of
2025
INTRODUCED BY HAYWOOD, KIM, STREET, KEARNEY, PISCIOTTANO,
FONTANA, SAVAL, HUGHES, COSTA AND KANE, JUNE 18, 2025
REFERRED TO LABOR AND INDUSTRY, JUNE 18, 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) and (i) and 4(a) of the act of
January 17, 1968 (P.L.11, No.5), known as The Minimum Wage Act
of 1968, are amended and the sections are 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
full face value, subject to such deductions, charges or
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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
account of tips may not exceed the value of tips actually
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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.]
* * *
(i) "Gratuities" or "tips" 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 4. Minimum Wages.--Except as may otherwise be
provided under this act:
(a) Every employer shall pay to each of his or her employes,
including tipped 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
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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) Twelve dollars ($12) an hour beginning January 1, 2026.
(10) Fifteen dollars ($15) an hour beginning January 1, 2027.
* * *
(a.2) 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.
(a.3) Beginning January 1, 2025, and each year 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 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
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multiple of five cents (5¢), shall be determined by the
secretary. The secretary shall, within ten days following the
determination, forward a notice to the Legislative Reference
Bureau for publication in the next available issue of the
Pennsylvania Bulletin.
(a.4) The following shall apply to tipped employes:
(1) Each tipped employe shall be informed in writing by the
employer, no later than twenty days after the effective date of
this subsection, that the tipped employe shall 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
pooling of gratuities among tipped employes.
(3) If a gratuity is added, either by the employer or the
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 2. Section 14.1 of the act is amended to read:
Section 14.1. Preemption.--[(a) Except as set forth in
subsection (b), this] 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.]
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Section 3. The addition of section 4(a.2) of the act shall
apply to contracts entered into or renewed on or after the
effective date of this section.
Section 4. This act shall take effect as follows:
(1) The amendment of the definition of "wage" under
section 3(d) of the act shall take effect in six months.
(2) The remainder of this act shall take effect
immediately.
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