If you’re an HR professional, business owner, or worker in Pennsylvania, you’ve likely wondered, what is Pennsylvania’s minimum wage, and why hasn’t it changed in over a decade? As someone who’s worked closely with HR teams across the state, I’ve seen firsthand how stagnant wages impact employee retention, business budgets, and workplace morale. Let’s break down everything you need to know about Pennsylvania’s minimum wage, including recent legislative efforts, exemptions, and what employers should prepare for next.
Pennsylvania’s Current Minimum Wage
Pennsylvania’s minimum wage has remained frozen at $7.25 per hour since 2009, matching the federal minimum wage. This rate applies to most non-exempt employees, but there are exceptions:
- Tipped workers: Employers can pay as little as $2.83/hour if tips bring the worker’s earnings to at least $7.25/hour.
- Student workers: Those under 18 working part-time can earn 85% of the minimum wage ($6.16/hour).
- Agricultural/seasonal workers: Exempt from overtime and minimum wage requirements.
Fun fact: Pennsylvania is one of 20 states still using the federal minimum wage. Every neighboring state (Maryland, Delaware, New York, New Jersey, and Ohio) has raised its minimum wage above $7.25, with most now at $15/hour.
Why the Push for Change? Key Updates for 2024–2026
In 2023, Pennsylvania’s Democratic-led House passed a bill to raise the minimum wage to $15/hour by 2026, but the proposal stalled in the Republican-controlled Senate. Governor Josh Shapiro has repeatedly called for an increase, arguing, “The floor of our wage structure is too damn low.” Here’s what’s on the table:
Proposed timeline:
- 2024: $11/hour
- 2025: $13/hour
- 2026: $15/hour (with annual inflation adjustments afterward)
Tipped workers: Their minimum wage would rise to 60% of the standard rate ($9/hour by 2026).
Over 335,000 Pennsylvanians earn between $7.26 – $12/hour, and 68% of minimum wage workers are adults over 20, many supporting families. A $15 wage could lift 150,000+ workers out of poverty and inject $1.7 billion into the state economy, according to the Keystone Research Center.
How Pennsylvania Compares to Neighboring States
Pennsylvania’s $7.25 minimum wage lags far behind regional peers:
- Maryland & Delaware: $15/hour
- New Jersey: $15.13/hour (2024)
- New York: $16 (NYC) to $15 (upstate)
- Ohio: $10.45/hour (exempts small businesses)
This disparity has led to “border bleed,” where workers commute to higher-paying states. For employers, this means tougher competition for talent. As one Harrisburg restaurant owner told me, “I pay $12/hour just to keep staff from jumping to Maryland jobs.”
Compliance Tips for Employers
Staying compliant with Pennsylvania’s minimum wage laws is critical to avoid penalties. Key requirements include:
- Overtime pay: 1.5x regular rate after 40 hours/week.
- Recordkeeping: Maintain payroll records for 2+ years.
- Tip credits: Ensure tipped workers’ hourly wages + tips meet $7.25. Deducting credit card fees from tips is illegal.
- Posters: Display PA Minimum Wage Act notices in workplaces.
Red flag: The PA Department of Labor & Industry reported a 6.6% increase in minimum wage violations in 2023. Penalties include back pay, fines, and even criminal charges.
What’s Next? How to Prepare for Potential Changes
While a $15/hour wage isn’t law yet, smart employers are already planning:
- Audit payroll: Identify employees earning under $15 and model budget impacts.
- Boost retention: Invest in training and benefits to offset future wage hikes.
- Advocate: Join industry groups to stay updated on legislative changes.
As an HR manager in Pittsburgh shared, “We’ve started phasing in $12/hour to stay competitive. It’s eased turnover and improved applicant quality.”
FAQs: Pennsylvania Minimum Wage
Q: Can cities in PA set their own minimum wage?
A: No. Unlike states like California, Pennsylvania prohibits local municipalities from setting higher wages.
Q: How many workers earn minimum wage in PA?
A: 67,800 workers (1.1% of the workforce) earned ≤$7.25 in 2023.
Q: What’s the penalty for underpaying employees?
A: Employers may owe back wages, face fines up to $1,000 per violation, or criminal charges for repeat offenses.
The Bottom Line
Pennsylvania’s minimum wage debate isn’t just about numbers, it’s about people. With 70% of voters supporting an increase, change seems inevitable. Whether you’re for or against a $15 wage, proactive planning and compliance are non-negotiable.
Did You Know?: Pennsylvania’s last minimum wage increase was in 2009. Adjusted for inflation, $7.25 in 2009 is worth just $5.10 today a 30% pay cut for workers.
