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Pennsylvania’s New Tip-Related and Overtime Pay Requirements

BY: Mavanee Anderson, Esq. | 08/19/22

Effective August 5, 2022, amended wage and hour administrative regulations impact Pennsylvania minimum wage requirements for tipped employees and the calculation of overtime pay for nonexempt, salaried workers who work a fluctuating workweek (FWW) schedule. The Pennsylvania Department of Labor and Industry (DLI) has provided final regulations, FAQs, and additional guidance for employers on its website [52 Pa.B. 2701, eff. 8-5-22; 34 Pa. Admin. Code 231].

Among the tip-related changes: tipped employees must earn at least $135 per month in order for the employer to apply a tip credit toward the required minimum wage; tip pools that include any employee who is paid a tip credited minimum wage may only include employees in occupations who customarily and regularly receive tips; and credit card processing fees cannot be paid out of employee tips.

The calculation of the regular rate of pay for overtime purposes for nonexempt, salaried employees is all remuneration paid to the employee for the week divided by 40 hours. This differs from the calculation of overtime under the federal Fair Labor Standards Act FWW method, which allows employers to divide the employee’s weekly salary by the number of hours worked during the workweek.

Interested in more state and local payroll coverage? APA’s PayState Update eNewsletter is perfect for you. PayState Update, Issue 15, Vol. 24 provides more detailed information on the Pennsylvania regulatory changes.


Mavanee Anderson, Esq., is Editor of PayState Update and Payroll Information Resources for the APA.