Tipped workers will get new protections under new PA rules starting Friday

Dylan Colbert considers himself lucky.

Working as a waiter at Buttonwood Grill in Peddler’s Village, a popular destination in Bucks County, the 21-year-old Temple University student said he was grateful to work at a restaurant where his employers treat him well and where customers tip generously.

“I’m probably one of the happiest food service people you can find,” said Colbert, who has worked at the restaurant since late 2020.

According to Colbert, depending on tips and salary fluctuation, you have to understand that some days may be better than others, but it all ends up balancing out.

“The hard part is keeping your head in the right frame of mind if you have a weekend where you don’t tip well. But over the course of a year, you will end up with an amount of money that you will be happy with, he pointed out.

Colbert has also had his fair share of difficult situations along the way, but admits he enjoys interacting with his clients.

“Sometimes you get tables that you can really chat with for a few minutes, that you just connect with authentically, and that’s nice. At this point it’s not really about making money, it’s more of a side benefit where you have these positive social interactions,” he said.

But even though he loves his job, he knows that not everyone who works for tips is so lucky.

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Like Colbert, most servers, bartenders, and other tip workers in the service industry rely on the friendliness of their customers in hopes of earning a living wage.

That’s why Pennsylvania has specific regulations in place to protect these workers.

Under current law, when an employee earns at least $30 in tips per month, their employer can reduce an employee’s hourly wage from $7.25 an hour, the Pennsylvania minimum wage, to 2 $.83 per hour. This is called a tip credit.

Raising that $30 tip threshold is among changes that will go into effect Friday when the Pennsylvania Department of Labor and Industry updated regulations for minimum wage and tip workers comes into force.

This is the first time these rules have been updated since 1977.

The changes cover five main areas for tipped workers:

  • Instead of $30, an employee must now earn $135 per month before their base hourly wage can be adjusted from $7.25 to $2.83 per hour. Also, the combination of their base salary and tips must average at least the minimum wage, or the employer must make up the difference.
  • Employers are prohibited from deducting credit card fees or other payment processing fees from employee tips.
  • Employers, managers and supervisors cannot receive tips from a tip pool.
  • Known as the 80/20 rule, an employer can only take tip credit when an employee spends 80% of their time performing tipping tasks. If an employee spends more than 20% of their time on non-tipping tasks, their employer cannot apply tip credit to hours that exceed 20%.
  • Employers should be transparent about automatic service charges, making it clear to customers that these charges are not tips for tipped employees.

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“The world of work has changed significantly since these regulations took effect in 1977, but tip workers remain an important and critical segment of Pennsylvania’s workforce. They are the only workers whose take home pay is ultimately dependent on the generosity of their customers and not the obligation of their employer,” said Pennsylvania Department of Labor and Industry Secretary Jennifer Berrier, in a press release.

“This update to the Minimum Wage Act regulations aims to protect tipped workers on the 21st century and ensure consistency for employers.

Next Friday, Colbert said he doesn’t think he’ll notice a difference, but he understands the importance of updates like this.

“I already have most of this stuff, and it’s just because I have good employers,” he said. “But for other people who don’t have it as well as me, it’s good that they have the advantages that they should have had anyway.”

A detailed explanation of these updated regulations can be found found on the Pennsylvania Department of Labor and Industry website.

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