Pennsylvania tip laws (2026)
Pennsylvania employers can pay tipped workers $2.83 an hour in cash if tips bring them to $7.25. The worker must earn more than $135 a month in tips. Card fees can't come out of tips, and the state still uses its own 80/20 side-work rule.
Pennsylvania at a glance
Tip credit allowedPennsylvania: $7.25 an hour minimum wage. Tipped staff can be paid $2.83 cash, with up to $4.42 counted from tips.
| State minimum wage | $7.25/hr | Statewide from .[1] |
|---|---|---|
| Tipped cash wage | $2.83 | Plus up to $4.42 in tips = $7.25.[1] |
| Max tip credit | $4.42 | Counted from tips.[2] |
| Tip pooling | Allowed | Mandatory pools allowed.[3][4][1] |
| Card-fee deduction | Not allowed | The full tip goes to the worker.[3] |
| Card tip payout | Pay out pooled tips by the regular payday for the period. | If the amount isn't known yet, pay as soon as practical after.[4] |
| Local minimum wages | None | State law blocks local rates.[5] |
Rates verified against the Pennsylvania Department of Labor and Industry on . Rates as of . Tipped totals are worked out from the rates above. Download this data (CSV)
02The yes/no sheet
Can you do this in Pennsylvania?
In Pennsylvania you can take a tip credit of up to $4.42 an hour, can require staff to join a tip pool and can't take card processing fees out of tips. Each answer below carries its condition and an official source.
| Number | Can you… | Answer | The condition |
|---|---|---|---|
| 01 | Take a tip credit against minimum wage? | Yes | Pay at least $2.83 cash and count up to $4.42 in tips. Tips must cover the gap.[1][2] |
| 02 | Make staff join a tip pool? | Yes | Give written notice at the employment offer or at least one pay period before the pool starts.[4][1] |
| 03 | Include bartenders, bussers, runners and hosts? | Depends | Bartender, busser, food runner and host: must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| 04 | Include cooks and dishwashers? | Depends | Cooks and dishwashers may join a pool only when every participant receives at least the full $7.25 wage before tips; management remains excluded.[3] |
| 05 | Give managers or supervisors a share? | No | Managers, supervisors and employers cannot receive pool shares. They may keep a direct customer tip only for service they provide entirely alone.[3] |
| 06 | Let an owner keep any of the tips? | No | Managers, supervisors and employers cannot receive pool shares. They may keep a direct customer tip only for service they provide entirely alone.[3] |
| 07 | Pick your own split (hours, points or percentages)? | Depends | No numerical maximum contribution percentage under the incorporated federal pooling rule; participant eligibility and retained-tip wage protections still apply.[4] |
| 08 | Take card processing fees out of tips? | No | The worker gets the full tip on the slip.[3] |
| 09 | Hold card tips until payday? | Deadline | Pay out pooled tips by the regular payday for the period. If the amount isn't known yet, pay as soon as practical after.[4] |
| 10 | Cover walkouts, breakage or register shortages from tips? | No | Not from tips.[3] |
| 11 | Keep a mandatory service charge for the house? | Yes | Yes, by default. Limited to genuine disclosed administration charges; a gratuity added to a bill belongs to the employee under the statute.[1][5] |
| 12 | Pay tips on a payroll card? | Depends | Voluntary written or electronic authorization, disclosures, insured accounts, free access and alternative payment protections apply. Offer another way to get paid too.[6] |
03State vs federal
Pennsylvania vs federal law
Pennsylvania sets a stricter rule than federal law on 3 of the 10 rules below. Where the two differ, the rule that is better for the worker applies.
| Rule | Federal (FLSA) | Pennsylvania | Comparison |
|---|---|---|---|
| Minimum wageSame as federal | Federal$7.25[7] | Pennsylvania$7.25[1] | Same as federal |
| Tipped cash wageStricter | Federal$2.13[7] | Pennsylvania$2.83[1] | Stricter |
| Max tip creditStricter | Federal$5.12[7] | Pennsylvania$4.42[2] | Stricter |
| Who counts as tippedState rule | FederalMore than $30 a month in tips, customarily and regularly received in the occupation.[7] | PennsylvaniaMore than $135 in tips per month.[1] | State rule |
| Managers in the poolState rule | FederalManagers/supervisors meeting the executive duties test cannot keep employees’ tips or receive from pools; they may keep only tips received directly for services they directly and solely provide. No salary-level test is used for this tip restriction.[7] | PennsylvaniaManagers, supervisors and employers cannot receive pool shares. They may keep a direct customer tip only for service they provide entirely alone.[3] | State rule |
| Kitchen in the poolState rule | FederalCooks and dishwashers may join a nontraditional mandatory pool only when all workers receive a direct cash wage of at least the full federal minimum wage and no tip credit is taken; employer/managers/supervisors remain excluded. State law may be stricter.[7] | PennsylvaniaCooks and dishwashers may join a pool only when every participant receives at least the full $7.25 wage before tips; management remains excluded.[3] | State rule |
| Card fees from tipsStricter | FederalOnly the actual proportional credit-card transaction fee may be deducted from charged tips; no deduction exceeding that fee or reducing required minimum wages; state law may forbid even that deduction.[7] | PennsylvaniaNot allowed[3] | Stricter |
| Card tip payoutState rule | FederalCharged tips due by regular payday, without waiting for processor reimbursement. Employer-administered pools fully distributed by regular payday for the workweek/pay period; if the amount/distribution cannot be determined before payroll, distribute as soon as practicable afterward.[7] | PennsylvaniaPay out pooled tips by the regular payday for the period. If the amount isn't known yet, pay as soon as practical after.[4] | State rule |
| Mandatory service chargesState rule | FederalA compulsory service charge is not an FLSA tip. Amounts distributed to employees are wages that may satisfy wage obligations and must enter the regular rate for overtime. This federal wage classification does not decide contractual or state-law ownership.[7] | PennsylvaniaThe business's money, limited to genuine disclosed administration charges; a gratuity added to a bill belongs to the employee under the statute.[1][5] | State rule |
| Overtime for tipped staffState rule | FederalFor covered nonexempt employees, overtime generally begins after 40 hours in a workweek. Use the full regular rate, at least the full federal minimum wage, not $2.13; the hourly tip credit is not increased for overtime. Voluntary tips above the tip credit are excluded; distributed service charges enter the regular rate.[7] | Pennsylvania1.5 times the regular rate after 40 hours. The tip credit isn't multiplied by 1.5, and overtime can't be figured from the $2.83 alone.[7][1] | State rule |
Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how Pennsylvania fits among the four tip credit classes.
04Wages
Minimum wage and the tip credit in Pennsylvania
In Pennsylvania employers can pay tipped staff $2.83 an hour and count up to $4.42 in tips toward the $7.25 minimum. If tips fall short, the employer makes up the difference.[1]
One server, one slow 30-hour week in Pennsylvania
A busy week with $132.60 or more in tips needs no top-up. Every tip above that is the server's. Fictional worker and tips.
Other rates
| Rate | Hourly |
|---|---|
| Youth or training Approved learners and studentsA special certificate is required; learner and student work limits apply. Rate set by formula: at least 85% of the applicable minimum wage.[5] | $6.16* |
| Youth or training No general lower training wageThe former 60-day training wage cannot be used after July 23, 2009.[1] | $7.25 |
* Worked out by Ferry from the formula, using the $7.25 state minimum wage. Not an official figure.
Scheduled increases
No statewide increase with a published amount is on file as of .
06Tip pool
Who can be in the tip pool in Pennsylvania
Pennsylvania allows tip pools, and employers can make them mandatory. Owners, managers and supervisors can't share in them. A tip pool collects tips and splits them among staff; a tip-out is one worker handing part of their tips to others.
| Role | Can share? | Condition |
|---|---|---|
| Front of house | ||
| Server | Depends | Must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| Bartender | Depends | Must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| Busser | Depends | Must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| Food runner | Depends | Must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| Host | Depends | Must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| Barback | Depends | Must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| Expo | Depends | Must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| Back of house | ||
| Cook | Depends | May join only when all pool participants receive at least the full minimum wage before tips.[3] |
| Dishwasher | Depends | May join only when all pool participants receive at least the full minimum wage before tips.[3] |
| Leadership | ||
| Shift lead | Depends | Must customarily receive tips if any participant earns a credited wage; actual supervisory duties can exclude shift leads.[3] |
| Manager or supervisor | Not allowed | Cannot receive pool tips; direct tips require providing the entire service alone.[3] |
| Owner | Not allowed | Cannot receive pool tips; direct tips require providing the entire service alone.[3] |
- Managers and supervisors
- Managers, supervisors and employers cannot receive pool shares. They may keep a direct customer tip only for service they provide entirely alone.[3]
- Owners
- Managers, supervisors and employers cannot receive pool shares. They may keep a direct customer tip only for service they provide entirely alone.[3]
- Back of house
- Cooks and dishwashers may join a pool only when every participant receives at least the full $7.25 wage before tips; management remains excluded.[3]
- Who sets the percentages
- Employers can require contributions from eligible staff. They disclose the setup in writing with the job offer or one pay period before it starts.[1]
- Cap on what a pool can take
- No numerical maximum contribution percentage under the incorporated federal pooling rule; participant eligibility and retained-tip wage protections still apply.[4]
- Pooling allowed
- Yes.[3]
07Put it to work
Setting up a tip pool in Pennsylvania
Under Pennsylvania rules, 6 of the 10 staff in this example can share a $1,200 pool. The table splits the same pool by percentage, by points and by hours.
| Who | By % | By points | By hours |
|---|---|---|---|
| Maya | $268.29 | $250.00 | $211.78 |
| Jordan | $268.29 | $250.00 | $211.76 |
| Priya | $268.29 | $250.00 | $211.76 |
| Sam | $175.61 | $200.00 | $211.76 |
| Luis | $109.76 | $125.00 | $176.47 |
| Ava | $109.76 | $125.00 | $176.47 |
| Theo | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Kim | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Rafa | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Dana | Not in the pool. Cannot receive pool tips; direct tips require providing the entire service alone. | ||
| Total | $1,200.00 | $1,200.00 | $1,200.00 |
Fictional restaurant and staff. The guest-facing staff here are assumed to meet Pennsylvania's condition for sharing (see who can be in the tip pool, above). Percentages and point weights are examples, not a recommendation. Shares are rounded to the cent, and any leftover cent goes to the first server. Run your own numbers in the tip pooling calculator.
Ferry Tip Manager: support pool split by hours
Servers and bartenders pay into the support pool, and Tip Manager splits it by hours worked. Each person sees their share, with no spreadsheet at close.
Who it's for Full-service restaurants that tip out bussers, runners and bar backs
08Service charges
Service charges vs tips in Pennsylvania
In Pennsylvania a mandatory service charge belongs to the business by default, limited to genuine disclosed administration charges; a gratuity added to a bill belongs to the employee under the statute. A tip is the guest's choice and belongs to staff.
| Question | OptionalTip | MandatoryService charge |
|---|---|---|
| Who sets the amount | The guest | The business |
| Who it belongs to | The worker it was left for, or the pool | The business, by default. Limited to genuine disclosed administration charges; a gratuity added to a bill belongs to the employee under the statute.[1][5] |
| Can it go to staff? | Yes, through the pool | Yes. Amounts paid to staff are wages, not tips.[7] |
| How it's taxed (federal) | Tip income the worker reports | Regular wages, with payroll taxes[9][10] |
| Guest notice | None needed | Explain in the contract and menu that the administrative charge is not a staff tip. The bill must show separate service-charge and tip lines.[1] |
- Step 1Did the guest choose whether to pay it, and how much?YesIt's a tip. It belongs to staff.NoIt's a mandatory charge. Go to step 2.
- Step 2What does Pennsylvania say?Business owns it by defaultThe business, by default. Limited to genuine disclosed administration charges; a gratuity added to a bill belongs to the employee under the statute.[1][5]
- Step 3Check the cityNo city service charge rules on file for Pennsylvania.
- Menu and receipt notice
- Explain in the contract and menu that the administrative charge is not a staff tip. The bill must show separate service-charge and tip lines.[1]
- Large-party auto gratuities
- A required automatic charge isn't a tip under federal rules. A gratuity added to a Pennsylvania bill belongs to the employee. Labels don't settle it.[9][10][5]
Local service charge rules
No local service charge rules on file for Pennsylvania.
More on the difference: service charge vs tip.
Banquets and events
Banquet charges need clear notice and two bill lines
A genuine administration charge can stay with the restaurant, but only with clear notice. A gratuity added to the bill belongs to the employee.[1][5]
- Covers banquets, special functions and package deals.
- The contract and menu explain that the administration charge is not a staff tip.
- The bill shows the service charge and the tip on separate lines.
- Amounts paid out to staff are pay, not tips, and count toward overtime.
09Card tips
Card tips in Pennsylvania: fees and payout timing
In Pennsylvania the card processing fee can't come out of a worker's tip; the full tip goes to the worker. Payout deadline: pay out pooled tips by the regular payday for the period. If the amount isn't known yet, pay as soon as practical after.
Pay the entire customer-authorized tip; do not deduct card or other payment-processing charges before individual payment or pool distribution.[3]
When card tips have to land
- TonightGuest adds a tip On the card, at the table.
- CloseShift is tallied The pool is split by your rules.
- DeadlinePennsylvania rule Pay out pooled tips by the regular payday for the period. If the amount isn't known yet, pay as soon as practical after.[4]
- Last dayFinal pay Quitting or discharged workers receive earned wages by the next regular payday; send by certified mail if the worker requests it.[11]
Paydays: Use regular paydays designated in advance. Payment follows the written contract; otherwise the customary trade interval or within 15 days after the pay period ends.[11]
Paying tips on a payroll card
- Allowed?DependsVoluntary written or electronic authorization, disclosures, insured accounts, free access and alternative payment protections apply.[6]
- Worker consent needed?Yes
- Free way to get the money?State ruleEach pay period, or weekly if paid more often: one free full net-pay withdrawal and one free in-network ATM withdrawal. Other fee bans apply.[6]
- Must you offer another option?YesChange as soon as practicable, by the first payday after 14 days from receiving the request and necessary information.[6]
- Holding cash tipsState ruleThe incorporated pooling deadline covers collected cash tips as well as card tips. Employers may hold them for eligible redistribution, not for their own use.[4]
- Tips shown on the pay stubDependsStatements show claimed minimum-wage allowances; keep separate tip and pool records, and give written notice when the hourly credit changes.[1]
Ferry Pay: each tip share, paid out digitally
Each person's direct tips, tip outs and payable amount in one view, then paid through Ferry Pay. No cash to keep on hand for payouts. Eligibility and fees apply.
Who it's for Operators who want to stop the nightly cash run
“Since launching this card program, we've reduced our cash-carrying costs by over 66 percent”
10Records
Records and notices in Pennsylvania
Keep each tipped worker's tips and hours on record, shift by shift. Pennsylvania: three years from the last entry for required records.
Pennsylvania State
- Tip records Maintain hours, wages, tip reports, credit amounts, hours in tipped and non-tipped occupations, and each pool participant’s name, position and distribution.[1]
- How long to keep them Three years from the last entry for required records.[1]
- Tip credit notice Required. Explain the tip-credit provisions. Give written notice of changes to the hourly credit and written pool-arrangement notice before the required deadline.[1]
- Posters and forms Pennsylvania Minimum Wage Law Summary poster; Written tip-pool arrangement notice.[1]
Everywhere Federal
- Tip records Maintain employee identity, time and pay records. Tip-credit employers additionally retain tipped employee, reported tips, credit amounts and hours/earnings by tipped and nontipped occupation. No-tip-credit employers operating mandatory pools record each recipient and weekly/monthly tips. IRS daily records/reporting are separate obligations.[7]
- How long to keep them FLSA: payroll records at least three years; underlying wage-computation records two years. Tax retention is separate.[12]
- Tip credit notice Oral or written notice must state cash wage; tip credit amount; credit cannot exceed actual tips; employee retains tips except valid traditional pool; credit unavailable until informed. Traditional pool contribution amounts also disclosed.[7]
- A written pool policy Good practice, not a federal rule: who's in, how it splits, when it pays. Share it with staff. How to write one.
Think your tips were handled wrong in Pennsylvania?
Workers in Pennsylvania can file a tip or wage claim with the Pennsylvania Department of Labor and Industry (800-932-0665). Filing is free, and this page can't settle a dispute; the state can.[8]
- Phone
- 800-932-0665[8]
- Website
- pa.gov/agencies/dli
Retaliation: Employers cannot fire or retaliate against employees for asserting minimum-wage rights; statutory protections include investigation testimony.[13]
Penalties: Workers can recover unpaid minimum wages, costs and attorney fees. Criminal fines also apply. Late wages can add 25% or $500, whichever is greater.[5][11]
Can they take this out of my tips?
- Walkouts and dine-and-dashNot allowedEmployer business costs cannot be taken from employee tips; separate wage-deduction rules also apply.[3]
- BreakageNot allowedEmployer business costs cannot be taken from employee tips; separate wage-deduction rules also apply.[3]
- Register shortagesNot allowedEmployer business costs cannot be taken from employee tips; separate wage-deduction rules also apply.[3]
- UniformsNot allowedEmployer business costs cannot be taken from employee tips; separate wage-deduction rules also apply.[3]
- Card processing feesNot allowedNo credit-card or other payment-processing fee may be deducted from tips.[3]
- A manager's shareNot allowedManagers, supervisors and employers cannot receive pool shares.[3]
11Law changes
What changed in Pennsylvania tip law, and what's coming
No statewide increase with a published amount is on file for Pennsylvania as of .
No changes to Pennsylvania tip or wage rules on file for the last 24 months.
Bills and ballot measures
- HB 1549 Passed House June 11, 2025; referred to Senate Labor and Industry June 18, 2025; not enacted.
Proposes changes to minimum wages, definitions and exemptions. It isn't law, so its amounts aren't used on this page. - HB 2189 Passed House March 24, 2026; Senate discharge motion September 30, 2026; not enacted.
Proposes changes to minimum wages, definitions and exemptions. It isn't law, so its amounts aren't used on this page.
Key statutes
- Minimum Wage Act sections 3(d), 4, 12, 13, 14.1
- 34 Pa. Code 231.31-.37 and 231.101a-.114
- Wage Payment and Collection Law sections 3, 5, 10
- 1975 Act 173 sections 1.1 and 2.1
Pending bills
Two minimum wage bills passed the House
Neither is law as of November 3, 2026, so $7.25 and $2.83 still apply.[14][15]
- Not enactedHB 1549 passes the House Proposes changes to minimum wages, definitions and exemptions.[14]
- Not enactedHB 1549 goes to Senate committee Referred to Senate Labor and Industry. Not enacted.[14]
- Not enactedHB 2189 passes the House Proposes changes to minimum wages, definitions and exemptions.[15]
- Not enactedSenate discharge motion on HB 2189 Still not enacted.[15]
12FAQ
Pennsylvania tip law questions
Plain answers to the 8 questions restaurant owners and staff ask most about Pennsylvania tip law, each linked to its source.
What is Pennsylvania's tipped minimum wage?
$2.83 an hour in cash. Cash wages plus retained tips must reach at least $7.25, and the employer covers any shortfall.[1]
How much in tips before a tip credit applies?
Can a restaurant require employees to pool tips?
Can cooks and dishwashers join the pool?
Yes, when everyone in the pool gets at least the full $7.25 before tips. A pool with any tip-credit worker is limited to customarily tipped jobs.[3]
Can card fees be deducted from tips?
Does Pennsylvania still have an 80/20 rule?
Is a banquet administration charge a tip?
Not when it is a genuine, disclosed administration charge. Contracts and menus must explain that, and bills show service charge and tip on separate lines.[1]
Can wages be paid on a payroll card without consent?
No. Written or electronic authorization is required, and workers can ask to switch to direct deposit or a check.[6]
13Compare
How Pennsylvania compares with nearby states
Pennsylvania borders Delaware, Maryland, New Jersey, New York, Ohio and West Virginia. Delaware, Maryland, New Jersey, New York, Ohio and West Virginia pay a higher minimum wage than Pennsylvania's $7.25. Running locations on both sides of a line? Each one follows its own state's rules.
Neighboring states
- Delaware tip laws$15.00 min wage $2.23 tipped cash wage Above $2.13
- Maryland tip laws$15.00 min wage $3.63 tipped cash wage Above $2.13
- New Jersey tip laws$15.92 min wage $6.05 tipped cash wage Above $2.13
- New York tip laws$16.00 min wage $10.70 tipped cash wage Above $2.13
- Ohio tip laws$11.00 min wage $5.50 tipped cash wage Above $2.13
- West Virginia tip laws$8.75 min wage $2.62 tipped cash wage Above $2.13
States with the same rules
Same tip credit class as Pennsylvania: Tip credit, cash wage above federal.
- Massachusetts tip laws$15.00 min wage $6.75 tipped cash wage Also a tip credit with a cash wage above $2.13, and no card fees from tips
- Maine tip laws$15.10 min wage $7.55 tipped cash wage Also a tip credit with a cash wage above $2.13, and no card fees from tips
- Colorado tip laws$15.16 min wage $12.14 tipped cash wage Also a tip credit with a cash wage above $2.13, and no card fees from tips
- Michigan tip laws$13.73 min wage $5.49 tipped cash wage Also a tip credit with a cash wage above $2.13, and no card fees from tips
- New Mexico tip laws$12.00 min wage $3.00 tipped cash wage Also a tip credit with a cash wage above $2.13
- Idaho tip laws$7.25 min wage $3.35 tipped cash wage Also a tip credit with a cash wage above $2.13
The law decides who's in. Ferry runs the split.
See how operators set pool rules in Ferry Tip Manager and pay tips out without a cash run. Bring your own Pennsylvania setup.
14Sources
Sources for Pennsylvania tip laws
Every figure on this page links to one of these 15 sources: 11 for Pennsylvania and 4 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.
- 134 Pa. Code Chapter 231 Minimum WagePennsylvania Legislative Reference Bureau · Official source · Checked Pinpoint: 34 Pa. Code 231.101a(b); 34 Pa. Code 231.101a(a)www.pacodeandbulletin.gov/secure/pacode/data/034/chapter231/chap231toc.html
What the source says
“The minimum wage for tipped employees is $2.83 per hour”
“an employer shall pay at least $7.25 an hour to all employees for all hours worked”
“Beginning July 24, 2009, $7.25 an hour.”
- 2Minimum Wages for Tipped EmployeesUS Department of Labor · Official source · Page updated · Checked Pinpoint: Table, Pennsylvania rowwww.dol.gov/agencies/whd/state/minimum-wage/tipped
What the source says
“Pennsylvania $7.25 $4.42 $2.83 $135 per month”
- 3Overtime and Tipped Worker Rules in PAPennsylvania Department of Labor and Industry · Official source · Checked Pinpoint: 80/20 Rule, opening paragraph; Tip Pooling, paragraph 2; Tip Poolingwww.pa.gov/agencies/dli/resources/compliance-laws-and-regulations/labor-management-relations/labor-law/overtime-and-tipped-worker-rules-in-pa
What the source says
“An employee for whom an employer takes a tip credit cannot spend more than 20 percent of their weekly working hours on duties that do not directly generate tips.”
“If all employees are paid at least the state minimum wage or higher, tip pools may include both tipped and non-tipped employees.”
“Tip pools including any employee who is paid a tip credited minimum wage (less than $7.25 per hour) may only include individuals in occupations who customarily and regularly receive tips.”
- 429 CFR 531.54, July 1 2022 editionUS Government Publishing Office · Official source · Page updated · Checked Pinpoint: 29 CFR 531.54(b)(1), 2022 edition incorporated by 231.112(a); 29 CFR 531.54(a), incorporated by 231.112(a); 29 CFR 531.54(b)(2), incorporated by 231.112(a)www.govinfo.gov/content/pkg/CFR-2022-title29-vol3/pdf/CFR-2022-title29-vol3-sec531-54.pdf
What the source says
“An employer does not violate section 3(m)(2)(B)’s prohibition against keeping tips if it requires employees to share tips with other employees who are eligible to receive tips.”
“Section 3(m)(2)(A) does not impose a maximum contribution percentage on mandatory tip pools.”
“if it fully distributes any tips the employer collects no later than the regular payday for the workweek in which the tips were collected,”
- 5Minimum Wage Act of 1968Pennsylvania General Assembly · Official source · Checked Pinpoint: Minimum Wage Act 3(d); Minimum Wage Act 4(b); Minimum Wage Act 14.1(a)www.legis.state.pa.us/WU01/LI/LI/US/HTM/1968/0/0005..HTM
What the source says
“The additional amount on account of tips may not exceed the value of tips actually received by the employe.”
“the minimum wage prescribed under this subsection (b) shall not be less than eighty-five percent of the otherwise applicable wage rate in effect under section 4.”
“this act shall preempt and supersede any local ordinance or rule concerning the subject matter of this act.”
- 6Credits to Accounts in Financial InstitutionsPennsylvania General Assembly · Official source · Page updated · Checked Pinpoint: 1975 Act 173 section 1.1; 1975 Act 173 section 2.1(5)(i)www.legis.state.pa.us/WU01/LI/LI/US/PDF/1975/0/0173..PDF
What the source says
“including a payroll card account, authorized to accept deposits or payments if the recipient has authorized the method of payment in writing or electronically.”
“if the recipient has authorized the method of payment in writing or electronically.”
“At least one withdrawal each pay period for any amount up to and including the full amount of the employee's net wages for that period or one such withdrawal weekly if the employee is paid more frequently than weekly.”
- 7Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Tip Credit, paragraph 2; Typical Problems, Overtime Problems, item 1www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
What the source says
“An employer must pay a tipped worker at least $2.13 per hour under the FLSA.”
“the federal minimum wage, which is currently $7.25 per hour.”
“The maximum tip credit that an employer can currently claim is $5.12 per hour: ($7.25 - $2.13 direct (or cash) wage = $5.12).”
- 8Minimum Wage Law Summary LLC-1Pennsylvania Department of Labor and Industry · Official source · Page updated · Checked www.pa.gov/content/dam/copapwp-pagov/en/dli/documents/individuals/labor-management-relations/documents/llc-1.pdf
What the source says
“Bureau of Labor Law Compliance”
“800-932-0665”
- 9Tip recordkeeping and reportingInternal Revenue Service · Official source · Checked Pinpoint: Service charges are not tips, paragraph 2; qualified tips deduction, net-income limit; tip income, Social Security/Medicarewww.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting
What the source says
“Service charges (also referred to as “auto-gratuities”), when distributed to an employee, are generally treated as wages paid by the employer to the employee rather than tips paid by the customer.”
“For self-employed individuals, the deduction may not exceed the individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.”
“These amounts are subject to federal income tax and generally are also subject to Social Security and Medicare taxes.”
- 10Revenue Ruling 2012-18Internal Revenue Service · Official source · Page updated 2012 · Checked Pinpoint: Q 1/A 1, four distinguishing factors; p. 1, ruling headingwww.irs.gov/pub/irs-drop/rr-12-18.pdf
What the source says
“compulsion; (2) the customer must have the unrestricted right to determine the amount; (3) the payment should not be the subject of negotiation or dictated by employer policy; and (4) generally, the customer has the right to determine who receives the payment.”
“Rev. Rul. 2012-18”
- 11Wage Payment and Collection LawPennsylvania General Assembly · Official source · Checked Pinpoint: Wage Payment and Collection Law 3(a); Wage Payment and Collection Law 5(a)www.legis.state.pa.us/WU01/LI/LI/US/HTM/1961/0/0329..HTM
What the source says
“Every employer shall pay all wages, other than fringe benefits and wage supplements, due to his employes on regular paydays designated in advance by the employer.”
“within the standard time lapse customary in the trade or within 15 days from the end of such pay period.”
“the wages or compensation earned shall become due and payable not later than the next regular payday of his employer on which such wages would otherwise be due and payable.”
- 12Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: Posting, paragraph 1www.dol.gov/agencies/whd/fact-sheets/21-flsa-recordkeeping
What the source says
“Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records.”
“Employers must display an official poster outlining the provisions of the Act, available at no cost from local offices of the Wage and Hour Division and toll-free, by calling 1-866-4USWage (1-866-487-9243).”
“Records on which wage computations are based should be retained for two years,”
- 13General Wage and Hour QuestionsPennsylvania Department of Labor and Industry · Official source · Checked Pinpoint: General Wage Questions, termination questionwww.pa.gov/agencies/dli/resources/compliance-laws-and-regulations/labor-management-relations/pennsylvania-s-minimum-wage-act/wage-faqs
What the source says
“the Pennsylvania Minimum Wage Act prohibits an employer from firing or otherwise retaliating against an employee because the employee has complained about their rights under the Act.”
- 14HB 1549 2025-2026 HistoryPennsylvania General Assembly · Official source · Checked www.palegis.us/legislation/bills/2025/hb1549
What the source says
“Third consideration and final passage, June 11, 2025 (102-101)”
- 15HB 2189 2025-2026 HistoryPennsylvania General Assembly · Official source · Checked www.palegis.us/legislation/bills/2025/hb2189
What the source says
“Third consideration and final passage, March 24, 2026 (104-95)”
15Methodology
How we research these pages
Every figure on this page comes from an official source, a statute, a regulation or a government agency page, and links to it where it is used. Ferry checks the page against those sources on a schedule and logs every change.
- 1
Official sources only
Statutes, regulations, state labor agencies, city ordinances and the U.S. Department of Labor. No vendor blogs, no AI answers, no secondary summaries as the only source.
- 2
Every figure is linked
Each rate and rule carries a numbered link to the statute or agency page behind it, with the exact pinpoint and, where available, a link that opens at the sentence itself.
- 3
Re-checked on a schedule
Every page is re-checked each January and July, and whenever a state or city changes a rate. Cash wage plus tip credit is checked against the minimum wage on every build.
- 4
Gaps are left out, not guessed
If a rule can't be confirmed from an official source, it isn't shown. The page points to the state agency instead.
What changed on this page
- First version of this page. Every figure was checked against the official sources listed on this page.
Researched by Ferry's tip operations research team. Last reviewed .
Changes to the law itself are listed in What changed and what's coming.
16Every state
Tip laws in every state
Pick any state for its tip credit, tip pool, service charge and card tip rules. Each chip shows the state's tip credit class.
- No tip creditNo tip credit
- Above $2.13Tip credit, cash wage above federal
- $2.13 cashTip credit, federal cash wage
- FederalFederal rates apply
51 of 51 state pages. Open the master guide for the federal baseline, tip credit classes and the full comparison table.