Last week, the PA Department of Labor & Industry announced that it was refusing a request from the PA Chamber of Business and Industry and other statewide business organizations to extend the public comment period on a proposed rule that would overhaul the regulations governing tipped employees and clarifies how the base hourly rate for overtime of salaried employees is calculated.
In a letter to state officials, business leaders noted that the 30-day public comment period, which was announced in the Pennsylvania Bulletin on Nov. 20, does not allow enough time for employers to fully understand the proposal and provide comment.
“At the height of the busiest time of year for businesses, the 30-day review period does not allow enough time for employers to understand the proposed changes and provide feedback,” said PA Chamber President and CEO Gene Barr. “Businesses are still faced with ongoing challenges to just keeping their doors open. They are also still reviewing an executive order put forth just a month ago related to mandatory wage increased and paid leave for employers receiving state assistance. We are disappointed in the state’s refusal to support Pennsylvania’s business community.”
The department’s proposed regulation covers five primary areas for tipped workers, including:
- Increasing by 450 percent the amount of tips an employee must receive monthly to qualify as a “tipped employee” from $30 to $135 before an employer can reduce an employee’s hourly pay from $7.25 per hour to $2.83 per hour.
- Codification of a recent federal regulation requiring that an employee spends at least 80 percent of their time on duties that directly generate tips, commonly known as the 80/20 rule.
- Allowing for tip pooling among tipped employees under certain circumstances.
- A prohibition on employers deducting credit card transaction charges from an employee’s tip left on a credit card.
- A requirement for employers to educate patrons on the employer’s use of service charges, clarifying that service charges are not gratuities for tipped employees.
Employers most impacted by the proposal are from the food service industry that has been decimated by the pandemic and business shutdown orders. This industry remains in a tenuous state and continues to face daunting challenges and additional costs to comply with new regulations and help ensure workplace safety.
The last day to submit comments is Dec. 20, 2021. Comments can be emailed to the Independent Regulatory Review Commission at firstname.lastname@example.org. Reference Department of Labor and Industry, Regulation #12-114: Minimum Wage, IRRC Number 3322.