Pennsylvania Minimum Wage Increase

December 27, 2006

 In 2007, Pennsylvania’s minimum wage is slated to increase in two steps. On January 1, 2007 the minimum wage will increase from its current level of $5.15 an hour to $6.25 an hour. Then on July 1, 2007, the rate will rise to $7.15 an hour.


Increases are delayed for small employers with 10 or fewer full time employees. Small employers must increase minimum wage to $5.65 an hour on January 1, 2007, $6.65 an hour on July 1, 2007 and $7.15 an hour on July 1, 2008.


A sixty day training wage rate, based on the Federal $5.15 an hour, is permitted for employees under 20 years of age. To utilize the training wage, employers must notify workers at the time of hire of both the training wage and the workers right to receive the Pennsylvania minimum wage after 60 calendar days of employment. The law also makes it clear that other workers may not be displaced to allow hiring of training wage workers.


The minimum wage credit for tipped employees will remain at $2.83 per hour. However, an employer will have to make up the difference if the employee’s tips and the $2.83 per hour do not meet the full Pennsylvania minimum wage. The tip credit applies only if an employee received more than $30.00 in tips during a month. If an employee does not receive more than $30.00 per month in tips, the employer must pay the regular minimum wage.


The competitive market for employees has most companies paying more than the state minimums; however, employers of all sizes should evaluate the impact of these increases on their budgets and compensation systems.


If you have more questions, the Department of Labor and Industry has published a FAQ related to the new wages.