State lawmakers returned to Harrisburg last week, as the House of Representatives passed legislation that would increase Pennsylvania’s minimum wage and impose new mandates on industry.  

House lawmakers also advanced proposals to facilitate workforce reentry and kick-start budget negotiations ahead of the June 30 deadline, among other items. 

Here is a recap of last week’s legislative action most relevant to Pennsylvania employers: 

 

Minimum wage (H.B. 2189; Dawkins) 

The House of Representatives voted 104-95 to pass House Bill 2189 last Tuesday. 

This legislation would increase Pennsylvania’s minimum wage incrementally to reach $15 by 2029, after which it would increase annually based on inflation.  The bill also sets the tip credit at 60 percent of the regular minimum wage rate, which represents a nearly 320 percent increase in labor costs for many restaurants and others with employees who qualify for the tip credit. The bill would also authorize counties to establish their own minimum wage rates beyond the state level. 

The PA Chamber does not believe this is the right approach to help low-income Pennsylvanians and have urged lawmakers to consider the unintended impact on small businesses, restaurants, non-profits, childcare providers, and other employers who may not have the capacity to absorb these significant costs. 

We opposed this legislation (CLICK HERE for our memo), which now advances to the Senate. 

 

Paid Leave mandate (H.B. 200; O’Mara) 

The House of Representatives voted 107-92 to pass House Bill 200 last Wednesday.  

 

This legislation would create a statewide paid leave entitlement program, requiring Pennsylvania employers to cover as much as 12 weeks of paid time off per employee, per year, for various purposes. The PA Chamber expressed concerns with many aspects of this bill and suggested lawmakers consider a more deliberative consideration of legislation of this magnitude, including engaging the business community expected to administer this program. 

 

This legislation imposes likely billions in new direct costs, as well as additional indirect costs and administrative burdens on employers, who would be prohibited from continuing their own leave policies that benefit their people while accommodating their own specific workplace and staffing requirements.  These impacts will certainly have a unique and significant impact on small businesses. Additional concerns are numerous including a lack of safeguards to avoid abuse; a new private right of action that will expose employers to lawsuits for even unintentional or clerical errors; and the ability to stack this new entitlement with existing federal and local leave requirements.  

 

The bill now goes to the Senate for consideration.  

 

 

Data center mandates (H.B. 1834; Matzie) 

The House of Representatives voted 104-95 to pass House Bill 1834 last Tuesday. 

This legislation establishes a new regulatory framework for the Pennsylvania Public Utility Commission (PUC), governing electric service to data centers. It creates additional fees and financial obligations and requires data centers to procure a specific amount of “clean firm energy.” 

The PA Chamber opposed an amendment (CLICK HERE for our memo) that would impose significant cost uncertainty, operational risk, and inflexible compliance requirements that could discourage data center investment in Pennsylvania, undermining the Commonwealth’s competitiveness at a critical moment for economic development.  

This amendment was approved by a vote of 102-97 on Monday. Having passed in the House, the underlying bill now advances to the Senate. 

 

Harmful interstate commerce and supply chain mandates (H.B. 1191; Matzie) 

The House of Representatives voted 120-79 to pass House Bill 1191 last Wednesday. 

This legislation would create a series of state-level operational mandates on freight rail that would disrupt interstate commerce, increase costs, and expose the Commonwealth to legal uncertainty without producing meaningful safety improvements. 

The bill would require railroads to break up or reconfigure trains at Pennsylvania’s borders, increasing handling, delays, and risk. These impacts would be felt across supply chains that support energy production, manufacturing, agriculture, and consumer goods, ultimately driving up costs for employers and consumers. 

We opposed this legislation (CLICK HERE for our memo), which now advances to the Senate. 

 

Pathways to employment for incarcerated people (H.B. 1042; Nelson) 

The House of Representatives voted 149-50 to pass House Bill 1042 last Monday. 

This legislation would allow people who complete educational and vocational programs while incarcerated to have accelerated parole eligibility consideration. Additionally, this legislation would assist individuals in obtaining licensing post-release by counting educational credits against the waiting time for license eligibility. 

Considering the Commonwealth’s ongoing workforce crisis, the PA Chamber understands the need to expand the pool of available workers and close the skills gap. By granting incarcerated individuals an opportunity for early release by participating in educational and vocational training, we help ensure they are equipped with the skills necessary to gain meaningful employment upon reintegration into society and help businesses fill open positions. 

We supported this legislation (CLICK HERE for our memo), which now advances to the Senate. 

 

Budget vehicle legislation (H.B. 2400; Harris) 

The House Appropriations Committee voted along party lines to advance House Bill 2400 last Wednesday.  

This legislation is identical to Gov. Josh Shapiro’s $53.2 billion budget proposal for Fiscal Year 2026-27 and is the first step by House Democrats in the monthslong budget negotiation process.  

The governor’s proposal calls for an increase of $2.7 billion from last year and would rely on hypothetical new revenues to pay for it, including taxes on skill games and legalized cannabis. Pennsylvania’s constitutionally mandated deadline for passing a state budget is June 30. 

House Speaker Joanna McClinton told abc27 that House Bill 2400 will serve as the legislative “vehicle” for budget negotiations, to be amended as talks progress in the coming months. 

 

Workplace meetings (H.B. 64; Khan) 

The House Labor & Industry Committee voted 14-12 to advance House Bill 64 last Monday. 

This legislation would restrict employers from hosting meetings in the workplace to communicate with their employees regarding a union organizing campaign, among other topics. 

Pennsylvanians being solicited to join a union deserve the benefit of multiple perspectives to assess the impact on their finances, careers, and workplace.  Employers should not be prohibited from holding meetings to discuss the impact of unionizing a workplace, consistent with existing federal and state law. 

We opposed this legislation (CLICK HERE for our memo), which now proceeds to the full House. 

 

Moratorium on water system privatization (H.B. 1964; Burgos) 

The House Consumer Protection, Technology, and Utilities Committee voted 15-11 to advance House Bill 1964 on Monday. 

This legislation would impose a statewide moratorium on the privatization of public water and wastewater systems, repeal the fair market valuation provisions established under Act 12 of 2016, and create a Water Utility Reform Working Group to study future policy changes. 

The bill restricts private water companies’ ability to invest in and acquire municipal systems, discourages needed infrastructure investment and creates regulatory uncertainty. By removing a voluntary, PUC-regulated pathway for public private partnerships, HB 1964 could limit solutions that help ensure reliable, compliant water service for communities and businesses across Pennsylvania. 

We opposed this legislation (CLICK HERE for our memo), which now proceeds to the full House. 

 

Data center water withdrawal oversight (H.B. 2246; Webster) 

The House Environmental & Natural Resources Protection Committee voted 16-10 to advance House Bill 2246 on Monday. 

This legislation would establish new notification, reporting, and permitting requirements for certain data center projects that exceed defined water use thresholds, including mandatory pre application review, expanded DEP oversight, post construction monitoring, and the potential denial or suspension of water withdrawals based on perceived risks to water resources. 

The bill introduces new costs and creates delays and uncertainty into the development process, potentially discouraging infrastructure investment in Pennsylvania, weakening local decision-making authority, and creating competitive disadvantages and losing economic investments to states with more predictable and sector neutral regulatory frameworks. 

We opposed this legislation (CLICK HERE for our memo), which now proceeds to the full House.