The Pennsylvania Department of Labor and Industry (DLI) recently issued final regulations for updates to the Pennsylvania Minimum Wage Act (PMWA), including payment of wages to tipped workers and calculating overtime for salaried nonexempt employees.

Tipped Worker Wages

The updated regulations align tipped worker rules more closely with federal requirements, but differences still remain.

• The threshold to qualify as a “tipped employee” was increased to customarily and regularly receiving more than $135 per month in tips.
• Federal tip pooling requirements under 29 C.F.R. § 531.54 were incorporated into the state regulations.
• The federal 80/20 rule for tip-producing and non-tip-producing work under 29 C.F.R. § 531.56 was also largely incorporated into the state regulations.
• Employers are prohibited from deducting credit card processing fees, among others, from employee tips.
• Tip pool documentation requirements: employee names, positions, and amounts distributed.
• Service charges are distinguished from tips, including that service charges cannot be used to satisfy the tip credit.
• Employers must notify patrons that service charges are administrative fees and not tips (e.g., agreements, menus, etc.). There also must be separate lines for service charges and tips on invoices.

Salaried Nonexempt Employees

The final rule also changes overtime rules applicable to salaried nonexempt employees (SNEs).

• The fluctuating workweek method for determining overtime was eliminated for SNEs.
• The rule implements a new overtime calculation method for SNEs. The regular rate is all weekly compensation divided by 40. The overtime rate is 1.5 times the regular rate for all hours worked over 40 in the workweek.

Employers should begin preparing now for implementation later this summer.

Action Items

1. Review the final rule here.
2. Revise tipped employee pay and documentation processes.
3. Update patron agreements and invoices regarding service charges and tips.
4. Update overtime calculations for salaried nonexempt employees.
5. Have appropriate personnel trained on new pay requirements.
6. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase

Washington recently amended its Paid Family and Medical Leave Act (PFML) to include new reasons for eligible leave, to require Washington’s Employment Security Department (ESD) to publish a current list of all employers that have an ESD-approved voluntary plan, and to end a collective bargaining agreement exception to the law.

SB 5649 added the first six weeks of postnatal leave for an incapacitated employee and bereavement to the list of reasons a covered employee can take eligible leave. The first six weeks of postnatal leave for an incapacitated employee is not presumptively considered medical leave. However, the employee may choose to substitute paid family leave. Employees taking leave for this reason cannot be required to submit a certification of a serious health condition.

Eligible employees may take bereavement leave during the seven calendar days after the death of a qualifying family member. A qualified family member is any family member for whom the employee would have qualified for medical leave for the birth of their child or to bond with their child following their birth or placement.

The bill also ends the collective bargaining agreement exception, effective December 31, 2023. Prior to this amendment, PFML did not apply to an employee covered by a collective bargaining agreement that was in existence on October 19, 2017; however, CBA-covered employees would be covered by the law if the CBA expired or was renegotiated.

Finally, ESD must publish a current list of all employers that have an ESD-approved voluntary plan. The list will be found on the ESD website.

Action Items

1. Review the bill here.
2. Have PFML policies updated.
3. Update leave procedures, as applicable.
4. Have appropriate personnel trained on the new requirements.
5. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase

IMPORTANT! California: Statewide Minimum Wage Increase January 1st

On January 1, 2023, the minimum wage in California will increase to $15.50 for all employers, regardless of size. Specifically, a 2016 minimum wage bill allows for increases following the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Employers should prepare to make wage increases at the beginning of the year. Note that the minimum wage increase will also increase the required salary threshold for overtime exempt employees in California, which is set at two times the state minimum wage.

REMINDER! California: Next CalSavers Deadline Approaching June 30th

All employers with 5 or more employees must register with CalSavers by June 30, 2022, regardless of whether they offer retirement programs (e.g., 401(k) plan). Employers who do offer retirement programs may register as exempt. Employers with 50 or more employees should have already been registered by June 30, 2021. Employers should visit www.calsavers.com for more information.

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For the first time, in Felder v. United States Tennis Association, the Second Circuit Court of Appeals identified a specific test for determining who is considered a “joint employer” under Title VII of the Civil Rights Act of 1964. The court aligned with other Circuit Courts stating that a joint employer relationship exists when two or more entities, according to common law principles, share significant control of the same employee, such as control over an employee’s hiring, firing, training, promotion, discipline, supervision, including handling of records, insurance, and payroll. Because exercise of control is the guiding indicator, factors indicating a joint-employment relationship may vary depending on the case. However, all aspects of the relationship must be assessed and weighed with no one factor being decisive.

There, an African-American security guard was assigned to work at a tennis tournament who refused to issue him security credentials; he alleged discrimination against the tournament association. The court stated that an entity can only be liable under Title VII as a joint employer for rejecting the temporary assignment of a contractor’s employee if the entity would have been the employee’s joint employer had it accepted his assignment. More specifically, an employee must allege that the entity would have exercised significant control over the terms and conditions of his employment.

Action Items

1. Review vendor contracts and joint employer relationships with legal counsel.
2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2022 ManagEase