Pennsylvania minimum wage aligns with the federal standard of $7.25 per hour and requires compliance with regulations outlined in the Fair Labor Standard Act (FLSA), but other aspects of Pennsylvania wage laws are more complex and nuanced.

Pennsylvania employers are entitled to pay tipped employees $2.83 per hour if the employee’s tips (plus base hourly wage) meet the state minimum wage rate of $7.25. Currently, employers may only take a tip credit if a tipped employee earns at least $135 per month in tips.

In some cases, a Pennsylvania employer can acquire a Sub-Minimum Wage Certificate from the Bureau of Labor Law Compliance to approve hourly payment below minimum wage. This typically only applies to learners, students, or people with disabilities as defined in The Minimum Wage Act of 1968 (43 P. S. § §  333.101—333.115. In each case, the wage must be at least 85% of the state minimum wage and meet specific hours, productivity, and length-of-work requirements that vary by worker category.

In alignment with federal standards, employers in Pennsylvania are required to pay employees 1.5x their regular pay rate for any time worked over 40 hours per week. Overtime wages must be included in the paycheck that follows the overtime work period. In Pennsylvania, an employer can discipline or terminate an employee if they refuse to work overtime, but in some cases collective bargaining agreements impact these circumstances, as well as rate of pay.

Certain categories of employees are exempt from overtime, including supervisors whose sole duty is to supervise, as well as executive, administrative, and professional employees. Ultimately, defined job responsibilities, details of the employment contract, and salary threshold all impact whether an employee is eligible for overtime.

Regulations in Pennsylvania regarding employee classification (exempt vs. non-exempt) are similar to federal law, but the Pennsylvania Minimum Wage Act of 1968 (PMWA) modifies and expands federal policy. Specifically, PMWA provides a statutory right to fair minimum wage and overtime and includes exemption categories for employees in outside sales, as well as professional, administrative, and executive roles. Exemption status can be verified through completion of a category-specific exemption test. 

The PMWA does not explicitly include a computer professional exemption, but such an employee may qualify for a white-collar exemption that is covered by state law. This category of employee is also challenging to address with regard to payment by salary vs. hourly pay and employers should be careful to avoid potential penalties for unpaid overtime compensation in the event of misclassification.

Similarly, it’s important for Pennsylvania employers to avoid misclassification of employees as independent contractors, especially if the misclassification demonstrably reduces payroll costs for the employer. Federal resources clarify the distinction between employee and contractor (articulating both federal and Pennsylvania definitions) and these guidelines should be honored to avoid serious penalties and a negative impact on workers, including their access to legitimate rights as an employee.