HARRISBURG (TNS) How tipped workers in Pennsylvania are paid is about to change — but some restaurant owners say it’s not going to mean more money in workers’ pockets.
Starting Aug. 5, a new threshold used to determine how much employers pay their workers goes into effect, but some in the hospitality industry say the regulation is meaningless.
“The threshold is so low, it doesn’t really affect anyone,” said Ron Kamionka, owner of several Harrisburg establishments including Sawyers and Bourbon Street Saloon. “I would say if you are earning tips lower than the threshold, you need to a get different job.”
In March, a five-member Independent Regulatory Review Commission voted unanimously to approve a Department of Labor and Industry regulation to raise pay for those who receive a “tipped minimum wage,” including restaurant servers.
Under the regulation, the amount in tips a worker must receive monthly increases from $30 to $135 before the employer can reduce hourly pay from the state’s minimum wage of $7.25 per hour to the $2.83 per hour tipped rate.
On average, servers make upwards of $50 or more per shift, with some bringing in hundreds of dollars, depending on when and where they work.
The commission’s decision revised a decades-old rule dating to 1977 about how employers pay tipped workers. Employers in Pennsylvania must pay at least $2.83 an hour, a level that bumps up to minimum wage if an employee’s tips don’t meet a certain threshold.
Bill Kokos, owner of Sierra Madre Saloon in Hampden Township, said the changes bring to mind former President Ronald Reagan’s quote: “The nine most terrifying words in the English language are, ‘I’m from the government, and I’m here to help’.”
He called the regulation a solution in search of a problem most restaurant owners aren’t overly concerned about. After hearing about the changes through his payroll company and accountant, Kokos said he was left shrugging his shoulders.
“It’s not going to change the world,” he said. “When I look at the nuances of it, I’m like come on, there are ad hoc situations each restaurant owner will have to stop what they are doing and call experts (to help them figure it out.)”
Of concern to Kokos are employees who hold regular full-time jobs and work a few shifts every month at the restaurant for extra cash. He emphasized some months they may meet the threshold but others they might not, which could make it difficult to to know how much to pay them.
Kamionka said he wishes the legislature would be less timid about making changes.
“It is a nice attempt, but if they are going to do something they should write legislation that actually affects people,” he said.
The approval is viewed as win for Wolf. The governor has been pushing for workplace improvements in Pennsylvania including overall higher minimum wages, despite resistance by Republicans. Taking the proposal to the commission allowed the Wolf administration to circumvent the legislative process.
According to the Wolf administration, between 93,000 and 160,000 Pennsylvania workers are paid a tipped minimum wage below $7.25 an hour.
“Our embarrassingly low minimum wage has widespread effects that go beyond the unfairly paid workers and their families,” Wolf said in a prepared statement in March. “When people earn a decent wage, they can contribute to the economic health of their communities and the commonwealth. When they don’t earn enough to pay for bare necessities, they are forced to rely on public benefits.”
The following areas for tipped workers are also covered under the proposal:
