pennsylvania travel pay laws

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Travel Time

Time spent traveling during normal work hours is considered compensable work time. Time spent in home-to-work travel by an employee in an employer-provided vehicle, or in activities performed by an employee that are incidental to the use of the vehicle for commuting, generally is not "hours worked" and, therefore, does not have to be paid. This provision applies only if the travel is within the normal commuting area for the employer's business and the use of the vehicle is subject to an agreement between the employer and the employee or the employee's representative.

Webpages on this Topic

Handy Reference Guide to the Fair Labor Standards Act - Answers many questions about the FLSA and gives information about certain occupations that are exempt from the Act.

Coverage Under the Fair Labor Standards Act (FLSA) Fact Sheet - General information about who is covered by the FLSA.

Wage and Hour Division: District Office Locations - Addresses and phone numbers for Department of Labor district Wage and Hour Division offices.

State Labor Offices/State Laws - Links to state departments of labor contacts. Individual states' laws and regulations may vary greatly. Please consult your state department of labor for this information.

Travel Pay Training

Rules for determining travel pay, employer questions about travel pay, recommended training for handling travel pay, find other travel pay training courses.

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• http://www.dol.gov/compliance/topics/wages-other-travel.htm

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Related Practices & Jurisdictions

• Labor & Employment
• Administrative & Regulatory
• Pennsylvania

The Pennsylvania Department of Labor and Industry has implemented new regulations under the Pennsylvania Minimum Wage Act (PMWA) that go into effect on August 5, 2022. The regulations make a number of important changes for employees who receive tips or service charges, as well as to overtime calculations for certain employees.

Some of the most-common questions that employers have asked about these new rules are discussed in this special report. (For an overview, see our article,  Pennsylvania Regulatory Commission Approves Expansive Tipped Employee Regulations .)

Which employees do the new regulations cover?

The new rules make a number of changes affecting employees whose pay includes tips or service charges. They also change how regular and overtime rates are calculated for non-exempt salaried employees only.

The new regulations provide: “The regular rate for salaried employees who are not exempt from overtime is the amount of remuneration determined under subsection (a), [which provides that all remuneration shall be included, with certain exceptions,] divided by 40 hours.” 34 Pa. Code § 231.43(g) (emphasis added). This change essentially codifies the Pennsylvania Supreme Court’s decision in Chevalier v. General Nutrition Centers, Inc., 656 Pa. 296 (2019), prohibiting use of the fluctuating-workweek method to calculate overtime for non-exempt salaried employees under the PMWA. Nothing in the new regulations extends this change to anyone other than non-exempt salaried employees.

Some legal observers have opined that the new regulations apply to all non-exempt employees, whether salaried or hourly, but this interpretation is plainly incorrect in light of the regulatory language quoted above. In addition, Department of Labor and Industry representatives rejected this interpretation at a recent presentation on the new regulations. When asked, “Will there be changes to the regular rate calculation for a standard hourly employee?” Director of the Bureau of Labor Law Compliance Bryan Smolock responded, “No, these changes only apply to salaried, non-exempt workers.”

Under the new regulations, do employers need to look at the $135-per-month threshold on average or from month to month?

The $135 tip threshold must be met each and every month — averaging does not appear to be permissible under the new rules. The regulations revise the definition of “tipped employee” to “an employee engaged in an operation in which the employee customarily and regularly receives more than $135 a month in tips.” 34 Pa. Code § 231.1(b) (emphasis added). In turn, the rule defines “customarily and regularly” as “a frequency which must be greater than occasional, but which may be less than constant.” At the same time, the regulations provide, “The tip credit only applies if an employee received over $135 in tips for a month.” 34 Pa. Code § 231.101a(b)(1). Employers should examine the threshold each month and pay the difference if the employee’s tips fall short. 34 Pa. Code § 231.101a(b)(2).

How do the new regulations affect tip pools?

Under the new rules, employees must receive advance notice of any tip-pooling arrangement. The federal Fair Labor Standards Act (FLSA) tip-pooling regulations, which are incorporated into the new Pennsylvania regulations by reference, require: “The employer must notify its employees of any required tip pool contribution amount[.]” 29 C.F.R. § 531.54(c)(2). The new regulations also require the employer to provide advance written notice of the tip pooling arrangement to all employees in the tip pool. 34 Pa. Code § 231.112(b). A single comprehensive written notice should be sufficient to satisfy both notice requirements.

The new regulations require employers to maintain records of the name, position, and amount distributed to every participant in the tip pool. 34 Pa. Code § 231.34(6).

Do the new regulations affect employees who are paid a percentage of banquet service charges?

Yes, the new regulations affect both banquet team members’ compensation and employers’ banquet operations.

The regulations define “service charge” as “a mandatory fee an employer may charge to a patron for service that an employee renders.” 34 Pa. Code § 231.1(b). Employers that “charge for the administration of a banquet, special function, or package deal shall notify patrons of this charge[.]” 34 Pa. Code § 231.114(a). This notice must appear in both the banquet agreement and on any banquet menu and must state that the charge “is for administration of the banquet … and does not include a tip to be distributed to the employees who provided service to the guests.” Id.; 34 Pa. Code § 231.114(b). Similarly, the billing statement for any banquet must include separate lines for service charges and tips. 34 Pa. Code § 231.114(c). That is, it must state the service charge(s) and include a separate line for patrons to tip.

Service charges count toward the employer’s minimum-wage obligation, but they may not be treated as tips (that is, service charges may not be used to reach the new $135-per-month threshold). 34 Pa. Code § 231.114(d).

Is it an issue if a banquet server’s hourly rate is under the minimum wage, but they receive additional wages from service charges?

No, this is permissible, so long as the banquet server’s regular rate — which includes all service charges — meets or exceeds the minimum wage. See 34 Pa. Code § 231.114(d).

How are employees who perform both tipped work and banquet service treated?

For employees who perform both tipped jobs and banquet service (which is also a tipped job given the new requirement that every banquet receipt include a separate tipping line), the employer must ensure the employee’s regular rate (which includes service charges) always meets or exceeds the minimum wage. Just as it does for employees who do not perform banquet service, the employer must ensure it does not take a tip credit for these employees, unless their tips exceed the new $135-per-month threshold. 34 Pa. Code §§ 231.1(b), 231.101a(b)(1).

What notices do the new regulations require?

The regulations require employers to provide several kinds of notice.

First, the FLSA tip-pooling regulations, which are incorporated into the new Pennsylvania regulations by reference, require: “The employer must notify its employees of any required tip pool contribution amount[.]” 29 C.F.R. § 531.54(c)(2). The new regulations also require the employer to provide advance written notice of the tip pooling arrangement to all employees in the tip pool. 34 Pa. Code § 231.112(b). A single comprehensive written notice should be sufficient to satisfy both notice requirements.

Second, employers that use banquet service charges must inform their customers of the charge on every banquet agreement, menu, and receipt. Each receipt must provide separate lines breaking out the amount of the service charge and providing an additional space for the customer to tip. 34 Pa. Code § 231.114(a), (b), (c).

Finally, the  mandatory PMWA poster  has been updated to  reflect the new regulations .

What are the differences between state and federal law for tipped employees?

Once the new regulations become effective, federal and Pennsylvania wage laws for tipped employees will differ as follows:

Defining tipped employees. Federal law defines a tipped employee as one “engaged in an occupation in which he or she customarily and regularly receives more than $30 a month in tips.” 29 C.F.R. § 531.50(d). Effective August 5, Pennsylvania law sets the monthly threshold at $135. 34 Pa. Code § 231.1(b).

Tip credits. The FLSA sets a minimum wage of $2.13 an hour for tipped employees and permits a tip credit of $5.12 an hour. Pennsylvania law sets a higher minimum wage of $2.83 an hour for tipped employees and permits a lower tip credit of $4.42 an hour. 34 Pa. Code § 231.101a.

Non-tipped duties. Both Pennsylvania and federal law permit a tip credit for non-tipped work that directly supports tip-producing work, so long as such work does not exceed 20 percent of the workweek. 29 C.F.R. § 531.56(f)(4)(i); 34 Pa. Code § 231.111(a) (incorporating 29 C.F.R. § 531.56 by reference). Federal regulations also prohibit a tip credit whenever non-tipped work exceeds 30 continuous minutes, but the new Pennsylvania regulations expressly exclude this provision when they incorporate the rest of the federal non-tipped-duties regulations. Compare 29 C.F.R. § 531.56(f)(4)(ii) with 34 Pa. Code § 231.111(a) (incorporating § 531.56 with the exception of subsection (f)(4)(ii)). As a practical matter, however, the employer should still pay at least minimum wage whenever a tipped employee performs more than 30 continuous minutes of non-tipped work, as the federal requirement is more stringent than the Pennsylvania requirement.

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GENERAL PROVISIONS § 231.1.  Definitions.  (a)  Terms used in this chapter shall have the same meaning and be defined in the same manner as in the act.  (b)  In addition to the provisions of subsection (a), the following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:     Act —The Minimum Wage Act of 1968 (43 P. S. § §  333.101—333.115).     Board —Food furnished on an established schedule.     Bona fide training program —One which must involve either formal instruction or on-the-job training during a period when the learner is entrusted with limited responsibility and is under supervision or guidance.     Bureau —The Bureau of Labor Law Compliance of the Department.     Customarily and regularly —A frequency which must be greater than occasional, but which may be less than constant.     Department —The Department of Labor and Industry of the Commonwealth.     Domestic services —Work in or about a private dwelling for an employer in the capacity as a householder, as distinguished from work in or about a private dwelling for such employer in the employer’s pursuit of a trade, occupation, profession, enterprise or vocation.     Hotel or motel —An establishment which as a whole or part of its business activities offers lodging accommodations for hire to the public, and services in connection therewith or incidental thereto.     Hours worked —The term includes time during which an employee is required by the employer to be on the premises of the employer, to be on duty or to be at the prescribed work place, time spent in traveling as part of the duties of the employee during normal working hours and time during which an employee is employed or permitted to work; provided, however, that time allowed for meals shall be excluded unless the employee is required or permitted to work during that time, and provided further, that time spent on the premises of the employer for the convenience of the employee shall be excluded.     Labor on a farm —Labor on a farm shall include the following:      (i) The term farm includes stock, dairy, poultry, fur-bearing animal, fruit and truck farms, plantations, orchards, nurseries, greenhouses or other similar structures used primarily in the raising of agricultural or horticultural commodities.      (ii) The term labor on a farm includes the employment of a person on a farm in connection with one of the following:        (A) Cultivating the soil.        (B) Raising or harvesting an agricultural or horticultural commodity, including the raising or hatching of poultry and the raising, shearing, feeding, caring for, training and management of livestock, bees, fur-bearing animals and wildlife.        (C) Harvesting of maple sap.        (D) The operation, management, conservation, improvement or maintenance of a farm and its tools and equipment.        (E) The operation or maintenance of ditches, canals, reservoirs or waterways used exclusively for removing, supplying and storing water for farming purposes.     Learner —A person who is participating in a bona fide training program for an occupation in which that person is employed, the required training period for which is recognized to be at least 2 weeks; provided however, that no person may be deemed a learner at an establishment in an occupation for which that person has completed the required training, and in no case may a person be deemed a learner in such an occupation at an establishment after 8 weeks of training, except that a person may be deemed a learner for a longer period if the Secretary finds after investigation that for the particular occupation a minimum of proficiency cannot be acquired in 8 weeks.     Lodging —A housing facility available for the personal use of the employee at all hours.     Minimum Wage Advisory Board —A Board created in the Department of Labor and Industry under section 6 of the act (43 P.S. §  333.106) regarding the Minimum Wage Advisory Board.     Nonprofit organization —A corporation, unincorporated association, community chest, fund or foundation organized and operated exclusively for religious, charitable or educational purposes, no part of the net earnings of which inures to the benefit of any private shareholder or individual.     Public amusement or recreational establishment —An establishment providing amusement, entertainment or recreation as its primary service to the public. The term also includes owners, lessees and concessionaires whose business is incidental to, connected to or a part of the business of the establishment. Amusement or recreational establishments shall be deemed public for the purpose of the act except for those that require as a condition for the use of the establishment one of the following:      (i) Individual membership.      (ii) Satisfaction of criteria fixed by the establishment other than the payment of a nominal fee.     Residential employee —An employee who resides and works on the premises of the employer.     Secretary —The Secretary of Labor and Industry of the Commonwealth. The term Secretary includes the authorized representative of the Secretary.     Service charge —A mandatory fee an employer may charge to a patron for services that an employee renders.     Student —An individual who is enrolled in and regularly attends, on a full-time basis during the daytime, an institution of learning offering a course of instruction leading to a degree, certificate or diploma, or who is completing residence requirements for a degree. A person is deemed to be a student during the time that school is not in session if that person was a student during the preceding semester, trisemester or similar term of instruction; provided however, that no person may be deemed a student for a period after the date of receipt of a degree, certificate or diploma.     Taxicab driver —An individual employed to drive an automobile equipped to carry no more than seven passengers which is used in the business of carrying or transporting passengers for hire on a zone or meter fare basis and which is not operated over fixed routes, between fixed terminals or under contract.     Tip credit —The difference between the statutory minimum wage outlined in section 4 of the act (43 P.S. §  333.104) and the hourly wage paid to tipped employees.     Tipped employee —An employee engaged in an operation in which the employee customarily and regularly receives more than $135 a month in tips.     Tips —Voluntary monetary contributions received by an employee from a guest, patron, or customer for services rendered.     USDOL —The United States Department of Labor.     Week —A period of 7 consecutive days starting on any day selected by the employer.     Worker with a disability —An individual whose earning capacity for the work to be performed is impaired by physical or mental deficiency or injury. Authority    The provisions of this §  231.1 amended under sections 4(c), 5(a)(5) and 9 of The Minimum Wage Act of 1968 (43 P.S. § §  333.104(c), 333.105(a)(5) and 333.109). Source    The provisions of this §  231.1 amended May 4, 1979, effective May 5, 1979, 9 Pa.B. 1467; corrected March 3, 1995, effective March 5, 1994, 25 Pa.B. 765; amended October 2, 2020, effective October 3, 2020, 50 Pa.B. 5459; amended May 6, 2022, effective in 90 days, 52 Pa.B. 2701. Immediately preceding text appears at serial pages (402594) to (402596) and (368151). Notes of Decisions     Domestic Services Exemption    The minimum wage and overtime pay exemption in The Minimum Wage Act of 1968 (43 P. S. § §  333.101—333.115) (MWA) applies only to domestic services provided by employees of a householder employer and is not preempted by the Fair Labor Standards Act of 1938 (29 U.S.C.A. § §  201—219) which exempts employees of third party employers. The regulatory definition tracks the MWA’s meaning and does not violate legislative intent. Bayada Nurses v. Commonwealth, Dep’t of Labor , 958 A.2d 1050 (Pa. Cmwlth. 2008).     Overtime    Determinations of what constitutes overtime must be decided under a collective bargaining agreement and not on the regulation alone. Pennsylvania Federation of BMWE v. National RR Passenger Corp. , 989 F.2d 112 (3rd Cir. Pa. 1993), cert. denied 114 S. Ct. 85 (U. S. 1993). Cross References    This section cited in §  231.114 (relating to service charges). No part of the information on this site may be reproduced for profit or sold for profit. This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.

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(610) 557-1977, blog , paychecks, pennsylvania’s laws on final paychecks and severance packages.

Pennsylvania’s employment laws dictate specific requirements for employers regarding final paychecks and severance packages. Understanding these regulations is crucial to ensure compliance and protect the rights of both employers and employees. Gibson & Perkins, PC is here to shed light on Pennsylvania’s legal framework surrounding final paychecks and severance packages, providing essential information for employers and employees alike.

When an employee leaves a job, whether voluntarily or involuntarily, they are entitled to receive their final paycheck within specific timeframes as determined by Pennsylvania law. Employers must adhere to these guidelines to avoid legal complications.

• Voluntary Separation: If an employee voluntarily resigns, Pennsylvania law requires the employer to issue their final paycheck on the next regular payday, or within 15 days, whichever comes first. This applies to employees who resign without giving prior notice as well.
• Involuntary Separation: In cases where an employee is terminated or laid off by the employer, Pennsylvania law mandates that the final paycheck be issued on the next regular payday, or within the standard timeframe established by the employer for paying employees, whichever occurs later.
• Deductions: Employers should note that they are only allowed to make authorized deductions from an employee’s final paycheck. This includes legally mandated deductions such as taxes, Social Security, and other applicable benefits. Any other deductions may require written consent from the employee.
• Unused Vacation and Paid Time Off (PTO): Pennsylvania law does not require employers to provide compensation for unused vacation or PTO upon an employee’s separation. However, it is essential for employers to have clear policies in place regarding such compensation to avoid any misunderstandings.

Pennsylvania’s Severance Package Laws 

While Pennsylvania law does not mandate employers to offer severance packages to employees, it is a common practice in many industries. However, certain guidelines should be followed to ensure fairness and prevent potential legal disputes.

• Employment Contracts: Severance packages are typically governed by employment contracts or agreements between the employer and employee. These contracts outline the terms and conditions for severance, including the amount, timing, and any conditions that must be met to receive the severance payment.
• Consideration: In exchange for receiving a severance package, employees may be required to sign a release of claims against the employer. This release typically waives the employee’s right to pursue legal action against the employer in the future. However, it is essential for both employers and employees to consult with legal professionals to ensure the release complies with all applicable laws and protects the interests of both parties.
• Discrimination and Retaliation: Employers must be cautious not to offer discriminatory or retaliatory severance packages. Federal and state laws prohibit employers from basing severance offers on discriminatory factors such as race, gender, religion, age, or disability. Employers should ensure that their severance practices align with these anti-discrimination laws.
• Collective Bargaining Agreements: If employees are covered by a collective bargaining agreement (CBA), severance terms may be negotiated and included in the agreement. Employers should review the relevant CBA to determine the severance requirements specific to their industry and workforce.

The Importance of Legal Counsel 

Navigating the intricacies of Pennsylvania’s laws on final paychecks and severance packages can be challenging for both employers and employees. That’s why seeking the guidance of experienced legal counsel is crucial to ensure compliance and protect your interests.

• For Employers: Understanding the legal requirements surrounding final paychecks and severance packages is essential to avoid potential legal disputes and costly litigation. Employment law attorneys, like those at Gibson & Perkins, PC, can help employers draft employment contracts, establish clear policies, and navigate the complexities of severance negotiations. They can ensure that your practices align with federal and state laws, protect against discrimination claims, and minimize legal risks associated with final paychecks and severance packages.
• For Employees: If you’re an employee facing a separation from your job, seeking legal advice is vital to ensure you receive the full benefits and protections you are entitled to under Pennsylvania law. Employment law attorneys can review your employment contracts, severance agreements, and release of claims to ensure they are fair and enforceable. They can also assist in negotiating better severance terms, protecting your rights against discrimination or retaliation, and pursuing legal action if your rights have been violated.

Gibson & Perkins, PC: Your Trusted Legal Partner:

At Gibson & Perkins, PC, we understand the complexities of Pennsylvania’s employment laws and are committed to providing the highest level of legal representation for employers and employees alike. Our team of experienced employment law attorneys has a deep understanding of the intricacies of final paycheck and severance package requirements.

With a personalized approach, we work closely with our clients to navigate the legal landscape, ensuring compliance and protecting their rights and interests. We provide comprehensive legal guidance, from reviewing employment contracts and policies to negotiating severance agreements and resolving disputes through litigation, if necessary.

Understanding Pennsylvania’s laws on final paychecks and severance packages is essential for both employers and employees to ensure compliance and protect their rights. By seeking legal counsel from Gibson & Perkins, PC, you can navigate these complex legal matters confidently. Our experienced attorneys will guide you through the process, ensuring compliance with the law, minimizing legal risks, and protecting your interests. Don’t hesitate to contact us today for professional legal assistance.

For reliable legal guidance on Pennsylvania’s laws regarding final paychecks and severance packages, contact Gibson & Perkins, PC. Our experienced employment law attorneys are ready to provide personalized assistance to help you understand and comply with the legal requirements, whether you’re an employer or an employee. Visit our website or call us to schedule a consultation and ensure that you receive the legal support you need. Trust Gibson & Perkins, PC, to protect your rights and provide effective legal solutions in employment law matters.

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