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Philadelphia Minimum Wage Laws: What You Need To Know

Philadelphia's minimum wages have been lowered by inflation, making it one of the most affordable U.S. cities. The state sets Philadelphia's minimum wage, but workers in the tipped industry are also affected. Employers in Philadelphia should be familiar with the minimum wage law to avoid any issues.

Inflation has reduced Philadelphia's minimum income.

Nearly half of Philadelphia's workers earn minimum wage. These workers are mostly Hispanic and black and less than half have college degrees. They are also more likely be from low-income families. Philadelphia's minimum wage earner fell from 11% to 8% in 2010, to just 8% in 2018. This is a significant decline, but Philadelphia still has an estimated 17% low-income residents.

Inflation has reduced the value of the federal minimum wages, which are also Pennsylvania's minimum wages. Philadelphia's minimum wages are among the lowest in large U.S. cities. Since 2006, Philadelphia's minimum wages have fallen below the minimum national standard. The economic state and policies in Philadelphia will determine the trajectory of minimum wage trends during the post-COVID-19 period.

The minimum wage in Philadelphia is just one part of the equation to alleviate poverty. The minimum wage has an impact on not only how much a worker makes but also how many hours he or she works. Numerous studies have shown that increasing the minimum wage not only benefits the economy but also keeps young people off the streets.

The inflation has largely contributed to Philadelphia's declining minimum wage over the past decade. The cost of living is rising rapidly. A full-time worker who earns $7.25 an hour would have to take $2,578 off their salary. This is a huge amount of money, especially when you consider inflation.

It has the lowest wage floor in any major American city

Philadelphia has the lowest minimum wages floor in America. While voters approved a ballot initiative to increase the minimum wage floor from $15 an hour to $15, the state prohibits local governments from increasing the minimum wage. Pennsylvania is one 27 state that has pre-emption laws which prevent local governments raising the minimum wage. Philadelphia has less than half the minimum wage earners who are full-time employed. They are predominantly Hispanic, non-white, young, and female.

According to the American Community Survey, which assesses poverty rates in major cities in America, approximately one-third (33%) of Philadelphia's workers earned $7.25 per hour or less in 2018. This is a large percentage of Hispanics and non-whites. Over one-third of workers were younger than 24 years old and had not completed a college degree. Philadelphia's minimum wage workers were young adults. These figures could not be exact because they include workers who weren't covered by the minimum wage law or whose employers didn't comply with it.

Philadelphia's poverty rate is especially severe, despite the fact that cities tend to have lower poverty rates in America than suburbs. A Pew Research Center study found that Philadelphia ranks second in poverty to Pittsburgh and 12 other large metropolitan areas. A two-member household earning less than $15,080 a year would be considered to be in the lowest rung of poverty. These people are often in low-wage occupations such as cashiers, nurses aides and chefs.

It is established by the state

Philadelphia has a minimum wage rate of $7.25 an hour, which is slightly higher than the federal minimum wage. Many Philadelphians make far less than the federally required minimum wage, despite having a low minimum wage. This doesn't help the state's unemployment rate, and it increases the need for city residents.

According to the Pennsylvania Department of Workforce Development (Pennsylvania Department of Workforce Development), more than one third of Philadelphia residents are paid the minimum wage. This percentage is higher among blacks, Hispanics and people without college degrees. Philadelphia's minimum wage workers tend to be young and non-white. They are also spread across all age groups with 58% of them being prime working age and 62 percent under 25.

Both employers and workers would be benefited by an increase in the minimum wages. It will generate more local business and lower the cost for state services. Businesses that are struggling to fill vacant positions would be benefited by it. The state house's Republicans believe that the market should determine minimum wage increases.

The federal minimum wage currently stands at $7.25 and Philadelphia's is $7.25. However, the state legislature does not have the ability to raise it. The city cannot therefore set its minimum wage. There is much debate about whether Philadelphia should change the minimum wage.

It is affected by tipped workers

Pennsylvania's new minimum wage rules are important to know if you live there. A few changes have been approved by the state's Department of Labor & Industry that will impact overtime and pay for tipped workers. These updates include the tip pooling rule, and new requirements to be classified as a "tipped worker" on August 5, 2022.

According to the American Community Survey, 44,000 Philadelphia residents earned less than $7.25 per hour in 2017. The lowest hourly earnings were found to be Hispanic, young and without a college degree. Data also shows that Philadelphia's minimum wage earners were 63 percent in four industries, including education, retail trade, accommodation, and food service. While the percentage has declined over the last decade, it still makes up a substantial portion of Philadelphia's workforce.

According to NBC10 the new Pennsylvania minimum wage laws were created to protect tip workers. Employers can no longer deduct tips from employees for non-cash payments, according to the new rules. Employers must also clearly inform customers that these service fees are not tips. Workers must also be allowed to tip-generate at least 80% of the time.

Tipping is permitted in Pennsylvania provided that tip-pooling does not exceed 80 percent of tip-generating tasks. Federal regulations state that tip-pooling is not allowed to be used as a reason for employees not being paid a minimum wage. Supervisors and managers are not permitted to tip-pool.