CORRECTIVE REPRINT PRIOR PRINTER'S NOS. 1492, 1885 PRINTER'S NO. 1887
No. 1090 Session of 2006
INTRODUCED BY TARTAGLIONE, HUGHES, COSTA, FERLO, FONTANA, FUMO, KASUNIC, KITCHEN, LAVALLE, LOGAN, MELLOW, MUSTO, O'PAKE, STACK, STOUT, WASHINGTON, A. WILLIAMS, C. WILLIAMS, WOZNIAK, BOSCOLA, BROWNE, CONTI, PILEGGI, RAFFERTY AND TOMLINSON, JANUARY 31, 2006
SENATOR SCARNATI, LABOR AND INDUSTRY, AS AMENDED, JUNE 19, 2006
AN ACT 1 Amending the act of January 17, 1968 (P.L.11, No.5), entitled 2 "An act establishing a fixed minimum wage and overtime rates 3 for employes, with certain exceptions; providing for minimum 4 rates for learners and apprentices; creating a Minimum Wage 5 Advisory Board and defining its powers and duties; conferring 6 powers and imposing duties upon the Department of Labor and 7 Industry; imposing duties on employers; and providing 8 penalties," giving effect to Federal changes in wage rates; 9 PROVIDING FOR PREEMPTION; and making editorial changes. <-- 10 The General Assembly of the Commonwealth of Pennsylvania 11 hereby enacts as follows: 12 Section 1. Section 3 of the act of January 17, 1968 (P.L.11, 13 No.5), known as The Minimum Wage Act of 1968, amended December 14 15, 1988 (P.L.1232, No.150), and December 21, 1998 (P.L.1290, 15 No.168), is amended to read: 16 Section 3. Definitions.--As used in this act: 17 (a) "Secretary" means the Secretary of Labor and Industry. 18 (b) "Department" means the Department of Labor and Industry. 19 (c) "Board" means the Minimum Wage Advisory Board created by
1 this act. 2 (d) "Wages" mean compensation due to any employe by reason 3 of his or her employment, payable in legal tender of the United 4 States or checks on banks convertible into cash on demand at 5 full face value, subject to such deductions, charges or 6 allowances as may be permitted by regulations of the secretary 7 under section 9. 8 "Wage" paid to any employe includes the reasonable cost, as 9 determined by the secretary, to the employer for furnishing such 10 employe with board, lodging, or other facilities, if such board, 11 lodging, or other facilities are customarily furnished by such 12 employer to his or her employes: Provided, That the cost of 13 board, lodging, or other facilities shall not be included as a 14 part of the wage paid to any employe to the extent it is 15 excluded therefrom under the terms of a bona fide collective- 16 bargaining agreement applicable to the particular employe: 17 Provided, further, That the secretary is authorized to determine 18 the fair value of such board, lodging, or other facilities for 19 defined classes of employes and in defined areas, based on 20 average cost to the employer or to groups of employers similarly 21 situated, or average value to groups of employes, or other 22 appropriate measures of fair value. Such evaluations, where 23 applicable and pertinent, shall be used in lieu of actual 24 measure of cost in determining the wage paid to any employe. 25 In determining the hourly wage an employer is required to pay 26 a tipped employe, the amount paid such employe by his or her 27 employer shall be an amount equal to: (i) the cash wage paid the 28 employe which for the purposes of the determination shall be not 29 less than the cash wage required to be paid the employe on the 30 date immediately prior to the effective date of this 20060S1090B1887 - 2 -
1 subparagraph; and (ii) an additional amount on account of the 2 tips received by the employe which is equal to the difference 3 between the wage specified in subparagraph (i) and the wage in 4 effect under section 4 of this act. The additional amount on 5 account of tips may not exceed the value of tips actually 6 received by the employe. The previous sentence shall not apply 7 with respect to any tipped employe unless: 8 (1) Such employe has been informed by the employer of the 9 provisions of this subsection; 10 (2) All tips received by such employe have been retained by 11 the employe and shall not be surrendered to the employer to be 12 used as wages to satisfy the requirement to pay the current 13 hourly minimum rate in effect; where the gratuity is added to 14 the charge made by the establishment, either by the management, 15 or by the customer, the gratuity shall become the property of 16 the employe; except that this subsection shall not be construed 17 to prohibit the pooling of tips among employes who customarily 18 and regularly receive tips. 19 (e) "Occupation" means any industry, trade, business, 20 service, or employment or class or group thereof in which 21 individuals are gainfully employed. 22 (f) "Employe" includes to suffer or to permit to work. 23 (g) "Employer" includes any individual, partnership, 24 association, corporation, business trust, or any person or group 25 of persons acting, directly or indirectly, in the interest of an 26 employer in relation to any employe. 27 (h) "Employe" includes any individual employed by an 28 employer. 29 (i) "Gratuities" means voluntary, monetary contributions 30 received by an employe from a guest, patron or customer for 20060S1090B1887 - 3 -
1 services rendered. 2 Section 2. Section 4 of the act, amended December 10, 1974 3 (P.L.916, No.303), July 1, 1978 (P.L.735, No.135), December 15, 4 1988 (P.L.1232, No.150), and July 9, 1990 (P.L.348, No.79), is 5 amended to read: 6 Section 4. Minimum Wages.--Except as may otherwise be 7 provided under this act: 8 (a) Every employer shall pay to each of his or her employes 9 wages for all hours worked at a rate of not less than: 10 (1) Two dollars sixty-five cents ($2.65) an hour upon the 11 effective date of this amendment. 12 (2) Two dollars ninety cents ($2.90) an hour during the year 13 beginning January 1, 1979. 14 (3) Three dollars ten cents ($3.10) an hour during the year 15 beginning January 1, 1980. 16 (4) Three dollars thirty-five cents ($3.35) an hour after 17 December 31, 1980. 18 (5) Three dollars seventy cents ($3.70) an hour beginning 19 February 1, 1989[, and thereafter]. 20 (6) Five dollars fifteen cents ($5.15) an hour beginning 21 September 1, 1997, and thereafter. SEPTEMBER 1, 1997. <-- 22 (7) SIX DOLLARS THIRTY CENTS ($6.30) AN HOUR BEGINNING 23 JANUARY 1, 2007. 24 (8) SIX DOLLARS SIXTY-FIVE CENTS ($6.65) AN HOUR BEGINNING 25 JANUARY 1, 2008, AND THEREAFTER. 26 (a.1) If the minimum wage set forth in the Fair Labor 27 Standards Act of 1938 (52 Stat. 1060, 29 U.S.C. § 201 et seq.) 28 is increased above [three dollars thirty-five cents ($3.35) an 29 hour] the minimum wage required under this section, the minimum 30 wage required under this section shall be increased by the same 20060S1090B1887 - 4 -
1 amounts and effective the same date as the increases under the 2 Fair Labor Standards Act, and the provisions of subsection (a) 3 are suspended to the extent they differ from those set forth 4 under the Fair Labor Standards Act. 5 (b) The secretary, to the extent necessary to prevent 6 curtailment of employment opportunities, shall by regulations 7 provide for the employment of learners and students, under 8 special certificates at wages lower than the minimum wage 9 applicable under this section, and subject to such limitations 10 as to number, proportion and length of service as the secretary 11 shall prescribe: Provided, That the minimum wage prescribed 12 under this subsection (b) shall not be less than eighty-five 13 percent of the otherwise applicable wage rate in effect under 14 section 4. A special certificate issued under this subsection 15 shall provide that for six or less students for whom it is 16 issued shall, except during vacation periods, be employed on a 17 part-time basis and not in excess of twenty hours in any 18 workweek at a sub-minimum rate. 19 In the case of an employer who intends to employ seven or 20 more students, at a sub-minimum rate, the secretary may issue a 21 special certificate only if the employer certifies to the 22 secretary that employment of such students will not create a 23 substantial probability of reducing the full-time employment 24 opportunities for other workers. 25 (c) Employes shall be paid for overtime not less than one 26 and one-half times the employe's regular rate as prescribed in 27 regulations promulgated by the secretary: Provided, That 28 students employed in seasonal occupations as defined and 29 delimited by regulations promulgated by the secretary may, by 30 such regulations, be excluded from the overtime provisions of 20060S1090B1887 - 5 -
1 this act: And provided further, That the secretary shall 2 promulgate regulations with respect to overtime subject to the 3 limitations that no pay for overtime in addition to the regular 4 rate shall be required except for hours in excess of forty hours 5 in a workweek. 6 (d) An employe whose earning capacity is impaired by 7 physical or mental deficiency or injury may be paid less than 8 the applicable minimum wage if either a license specifying a 9 wage rate commensurate with the employe's productive capacity 10 has been obtained by the employer from the secretary or a 11 Federal certificate is obtained under section 14(c) of the Fair 12 Labor Standards Act of 1938 (52 Stat. 1060, 29 U.S.C. § 201 et 13 seq.). A license obtained from the secretary shall be granted 14 only upon joint application of employer and employe. 15 (E) NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A)(7) AND <-- 16 (8), THE MINIMUM WAGE SET FORTH IN SUBSECTION (A)(6) SHALL APPLY 17 TO MINORS SUBJECT TO THE ACT OF MAY 13, 1915 (P.L.286, NO.177), 18 KNOWN AS THE "CHILD LABOR LAW," EXCEPT THOSE MINORS DESCRIBED IN 19 SECTION 7.2 OF THE "CHILD LABOR LAW," WHO SHALL RECEIVE 85% OF 20 THE MINIMUM WAGE UNDER SUBSECTION (A)(7) AND (8). 21 Section 3. Section 5 of the act, amended December 10, 1974 22 (P.L.916, No.303), July 1, 1978 (P.L.735, No.135), December 15, 23 1988 (P.L.1232, No.150), and July 9, 1990 (P.L.348, No.79), is 24 amended to read: 25 Section 5. Exemptions.--(a) Employment in the following 26 classifications shall be exempt from both the minimum wage and 27 overtime provisions of this act: 28 (1) Labor on a farm; 29 (2) Domestic services in or about the private home of the 30 employer; 20060S1090B1887 - 6 -
1 (3) Delivery of newspapers to the consumer; 2 (4) In connection with the publication of any weekly, 3 semiweekly, or daily newspaper with a circulation of less than 4 four thousand, the major part of which circulation is within the 5 county where published or counties contiguous thereto; 6 (5) In a bona fide executive, administrative, or 7 professional capacity (including any employe employed in the 8 capacity of academic administrative personnel or teacher in 9 elementary or secondary schools) or in the capacity of outside 10 salesman (as such terms are defined and delimited from time to 11 time by regulations of the secretary, except that an employe of 12 a retail or service establishment shall not be excluded from the 13 definition of employe employed in a bona fide executive or 14 administrative capacity because of the number of hours in his or 15 her workweek which he or she devotes to activities not directly 16 or closely related to the performance of executive 17 administrative activities, if less than forty percent of his or 18 her hours worked in the workweek are devoted to such 19 activities); 20 (6) In the activities of an educational, charitable, 21 religious or nonprofit organization where the employer-employe 22 relationship does not in fact exist or where the services are 23 rendered to such organization gratuitously; 24 (7) In seasonal employment, if the employe is under eighteen 25 years of age, or if a student under twenty-four years of age, by 26 a nonprofit health or welfare agency engaged in activities 27 dealing with handicapped or exceptional children or by a 28 nonprofit day or resident seasonal recreational camp for campers 29 under the age of eighteen years, which operates for a period of 30 less than three months in any one year; 20060S1090B1887 - 7 -
1 (9) In employment by an establishment which is a public 2 amusement or recreational establishment, organized camp, or 3 religious or nonprofit educational conference center, if (i) it 4 does not operate for more than seven months in any calendar 5 year, or (ii) during the preceding calendar year, its average 6 receipts for any six months of such year were not more than 7 thirty-three and one-third percent of its average receipts for 8 the other six months of such year; 9 (10) Golf caddy; 10 (11) In employment as a switchboard operator employed by an 11 independently owned public telephone company which has not more 12 than seven hundred and fifty stations; 13 (12) Employes not subject to civil service laws who hold 14 elective office or are on the personal staff of such an 15 officeholder, are immediate advisers to him or her, or are 16 appointed by him or her to serve on a policy-making level. 17 (b) Employment in the following classifications shall be 18 exempt from the overtime provisions of this act: 19 (1) Seaman; 20 (2) Any salesman, partsman, or mechanic primarily engaged in 21 selling and servicing automobiles, trailers, trucks, farm 22 implements, or aircraft if employed by a nonmanufacturing 23 establishment primarily engaged in the business of selling such 24 vehicles to ultimate purchasers; 25 (3) Any driver employed by an employer engaged in the 26 business of operating taxicabs; 27 (4) Any employe employed as an announcer, news editor, or 28 chief engineer by a radio or television station, the major 29 studio of which is located (i) in a city or town of one hundred 30 thousand population or less, according to the latest available 20060S1090B1887 - 8 -
1 decennial census figures as compiled by the Bureau of the 2 Census, except where such city or town is part of a standard 3 metropolitan statistical area, as defined and designated by the 4 Bureau of the Budget, which has a total population in excess of 5 one hundred thousand, or (ii) in a city or town of twenty-five 6 thousand population or less, which is part of such an area but 7 is at least forty airline miles from the principal city in such 8 area; 9 (5) Any employe engaged in the processing of maple sap into 10 sugar (other than refined sugar) or syrup; 11 (6) Employment by an establishment which is a motion picture 12 theatre; 13 (7) Any employe of a motor carrier with respect to whom the 14 Federal Secretary of Transportation has power to establish 15 qualifications and maximum hours of service under 49 U.S.C. § 16 3102(b)(1) and (2) (relating to requirements for qualifications, 17 hours of service, safety and equipment standards). 18 (C) AN EMPLOYER WHOSE ANNUAL GROSS PAYROLL IS LESS THAN FIVE <-- 19 HUNDRED THOUSAND DOLLARS ($500,000) SHALL PAY 85% OF THE MINIMUM 20 WAGE UNDER SECTION 4(A)(7) AND (8), UNLESS OTHERWISE EXEMPT FROM 21 THE MINIMUM WAGE PROVISIONS OF SECTION 4(A)(6), SUCH EMPLOYER 22 SHALL PAY THE MINIMUM WAGE SET FORTH UNDER SECTION 4(A)(6). 23 Section 4. Sections 6, 7, 8 and 9 of the act are amended to 24 read: 25 Section 6. Minimum Wage Advisory Board.--(a) There is 26 hereby created in the Department of Labor and Industry a Minimum 27 Wage Advisory Board consisting of nine members to be appointed 28 by the secretary to assist him or her in carrying out his or her 29 duties under this act, and for the purpose of conducting public 30 hearings at the request of the secretary in order to recommend 20060S1090B1887 - 9 -
1 rules and regulations for the occupations covered within this 2 act. 3 (b) Of the nine members, three shall be representatives of 4 an established recognized association of labor organizations, 5 three shall be representatives of an established recognized 6 association of employers and three shall be members from the 7 general public. The Secretary of Labor and Industry or his or 8 her designated representative shall be chairman of the board. 9 (c) Each member of the board shall receive compensation of 10 thirty dollars ($30) per day plus necessary expenses, for each 11 day actually spent in the performance of his or her duties. No 12 employe of the Commonwealth shall receive any additional 13 compensation or expenses on account of his or her services under 14 this act. 15 (d) At least ten days' public notice shall be given in the 16 manner prescribed by the board prior to any public hearing of 17 the board. Five members of the board shall constitute a quorum. 18 (e) The board shall have the power and duty to: 19 (1) consult with the secretary concerning any matter arising 20 under the administration of this act and advise and assist him 21 or her in carrying out the duties prescribed for him or her by 22 section 8 of this act; 23 (2) conduct public hearings at the request of the secretary 24 in order to develop rules and regulations in accordance with 25 section 9 of this act, in which hearings due process of law 26 shall be observed and any person may appear and be heard or file 27 statements in support of his or her position; 28 (3) the board shall submit its report including 29 recommendations for the promulgation of rules and regulations to 30 the secretary, who shall within thirty days thereafter accept 20060S1090B1887 - 10 -
1 such report or refer it to the board for further consideration 2 and consultation. If the report is referred to the board for 3 further consideration, the secretary shall, in consultation with 4 the board, modify, amend, or otherwise act upon such report 5 within sixty days thereafter. Rules and regulations developed 6 and promulgated hereunder shall be published and any person 7 aggrieved thereby, shall have a right of review as set forth in 8 section 10 of this act. 9 Section 7. Investigations.--(a) The secretary or his or her 10 representative shall have authority to investigate and ascertain 11 the wages of persons employed in any occupation in the 12 Commonwealth; enter and inspect the place of business or 13 employment of any employer of employes in any occupation in the 14 Commonwealth at any reasonable time, for the purpose of 15 examining and inspecting any records of any such employer that 16 in any way relate to wages, hours, or other conditions of 17 employment of any such employes; copy any or all of such records 18 as [he] the secretary or [his] an authorized representative may 19 deem necessary or appropriate; require from such employer full 20 and accurate statements in writing, at such times as the 21 secretary may deem necessary, of the wages paid to all employes 22 in his or her employment; and interrogate such persons for the 23 purpose of ascertaining whether the provisions of this act and 24 the regulations issued thereunder have been and are being 25 complied with. 26 Section 8. Duty of Employer.--Every employer of employes 27 shall keep a true and accurate record of the hours worked by 28 each employe and the wages paid to each, and shall furnish to 29 the secretary or his or her duly authorized representative, upon 30 demand, a sworn statement of the same. Such records shall be 20060S1090B1887 - 11 -
1 open to inspection by any duly authorized representative of the 2 secretary at any reasonable time and shall be preserved for a 3 period of three years. Every employer subject to this act shall 4 keep a summary of this act and any regulations issued thereunder 5 applicable to him or her, posted in a conspicuous place where 6 employes normally pass and can read it. Employers shall, upon 7 request, be furnished copies of such summaries without charge. 8 Employers shall permit any duly authorized representative of the 9 secretary to interrogate any employe in the place of employment 10 and during work hours with respect to the wages paid to and the 11 hours worked by such employe or other employes. 12 Section 9. Enforcement; Rules and Regulations.--The 13 secretary shall enforce this act. [He] The secretary shall make 14 and, from time to time, revise regulations, with the assistance 15 of the board, when requested by [him] the secretary, which shall 16 be deemed appropriate to carry out the purposes of this act and 17 to safeguard the minimum wage rates thereby established. Such 18 regulations may include, but are not limited to, regulations 19 defining and governing bona fide executive, administrative, or 20 professional employes and outside [salesmen] sales persons, 21 learners and apprentices, their number, proportion, length of 22 learning period, and other working conditions; handicapped 23 workers; part-time pay; overtime standards; bonuses; allowances 24 for board, lodging, apparel, or other facilities or services 25 customarily furnished by employers to employes; allowances for 26 gratuities; or allowances for such other special conditions or 27 circumstances which may be incidental to a particular employer- 28 employe relationship. 29 Section 5. Section 12 of the act, amended December 10, 1974 30 (P.L.916, No.303), is amended to read: 20060S1090B1887 - 12 -
1 Section 12. Penalties.--(a) Any employer and his or her 2 agent, or the officer or agent of any corporation, who 3 discharges or in any other manner discriminates against any 4 employe because such employe has testified or is about to 5 testify before the secretary or his or her representative in any 6 investigation or proceeding under or related to this act, or 7 because such employer believes that said employe may so testify 8 shall, upon conviction thereof in a summary proceeding, be 9 sentenced to pay a fine of not less than five hundred dollars 10 ($500) nor more than one thousand dollars ($1,000), and in 11 default of the payment of such fine and costs, shall be 12 sentenced to imprisonment for not less than ten days nor more 13 than ninety days. 14 (b) Any employer or the officer or agent of any corporation 15 who pays or agrees to pay any employe less than the rates 16 applicable to such employe under this act shall, upon conviction 17 thereof in a summary proceeding, be sentenced to pay a fine of 18 not less than seventy-five dollars ($75) nor more than three 19 hundred dollars ($300) or to undergo imprisonment of not less 20 than ten nor more than sixty days, or both. Each week in which 21 such employe is paid less than the rate applicable to him or her 22 under this act and for each employe who is paid less than the 23 prescribed rate, a separate offense shall be deemed to occur. 24 Any agreement between the employer and the employe to work for 25 less than the applicable wage rate shall be no defense to action 26 by the Commonwealth under this section. 27 (c) Any employer or the officer or agent of any corporation 28 who violates any other provision of this act or of any 29 regulation issued thereunder shall, upon conviction thereof in a 30 summary proceeding, be sentenced to pay a fine of not less than 20060S1090B1887 - 13 -
1 one hundred dollars ($100) nor more than five hundred dollars 2 ($500), and each day of such failure to comply with this act or 3 regulation, shall constitute a separate offense. 4 SECTION 6. THE ACT IS AMENDED BY ADDING A SECTION TO READ: <-- 5 SECTION 14.1. PREEMPTION.--(A) EXCEPT AS SET FORTH IN 6 SUBSECTION (B), THIS ACT SHALL PREEMPT AND SUPERSEDE ANY LOCAL 7 ORDINANCE OR RULE CONCERNING THE SUBJECT MATTER OF THIS ACT. 8 (B) THIS SECTION DOES NOT PROHIBIT LOCAL REGULATION PURSUANT 9 TO AN ORDINANCE WHICH WAS ADOPTED BY A MUNICIPALITY PRIOR TO 10 JANUARY 1, 2006, AND WHICH REMAINED IN EFFECT ON JANUARY 1, 11 2006. 12 Section 6 7. This act shall take effect in 60 days. <-- A31L43VDL/20060S1090B1887 - 14 -