New Pa. minimum wage regulations for tipped workers go into effect
PITTSBURGH (KDKA) - Changes to minimum wage regulations for tipped workers took effect Friday. It's a long time coming -- decades, to be specific.
"I don't think it's fair we get charged credit card fees because we only make $2.83 an hour," said server Brittany Cozza.
Cozza said new minimum wage regulations that went into effect Friday are a game changer for servers. They'll add more money that is rightfully theirs already to their pocket.
This new legislation has been put into place to help protect tipped workers.
The biggest takeaway will be preventing an employer from deducting credit card fees from employee tips.
For example, if someone leaves a $5 tip on their credit card and it costs 20 cents to process the tip, the employee is no longer responsible for that fee. The employer will now have to absorb the cost, giving the employee $5 instead of $4.83.
While this is good news for tipped workers, it's not for employers.
"Roughly 90% of my sales are credit cards," said Dean Prohaska, who owns the Red Star Restaurant in Imperial. "So with customers tipping on credit cards, that number at 2.4 to 3% is a lot of money. Prior to COVID, it wasn't a problem, but now that we're getting crushed on every section, it becomes an issue."
Other changes include that a tipped employee must now make at least $135 in monthly tips before an employer can reduce their salary to $2.83 an hour.
Also, tip pooling is allowed but now excludes managers and owners.
Sen. Wayne Fontana, who is a staunch supporter of the new regulations, believes this will definitely help working families.
He sent KDKA this statement:
"tI's not fair, nor smart business, for credit card processing fees to be passed along to employees. Employers should want their employees to make as much money as possible. That would reflect good service, retention of employees and suggest a healthy work environment."
"He's right, we do want to keep our employees," said Prohaska. "We work hard and are paying extra to keep our employees. So profit margins keep shrinking, so it just gets tough."
Fontana said this is just a small step forward. His hope is to raise what he called poverty level minimum wage to $12 an hour.