The City of Philadelphia has enacted legislation (Bill Number 250065), which clarifies how to calculate the paid sick leave rate of pay for tipped employees.

The Details

Background

The Promoting Healthy Families and Workplace Act (the “Act”) requires certain Philadelphia employers to provide employees who work in Philadelphia at least 40 hours a year with paid sick leave. Under the Act, an employee accrues one hour of sick leave for 40 hours worked, which includes any overtime. Exempt administrative, executive or professional employees accrue sick leave based on their normal workweek or a 40-hour workweek, whichever is less.  

Employees are permitted to use 40 hours of paid sick time for:  

• An existing health condition requiring diagnosis, care, or treatment;  
• Preventative care; or  
• Issues related to an employee being a victim of domestic violence, sexual assault, or stalking. 

Bill Number 250065

Under the law, to calculate the hourly rate of pay for paid sick time for a tipped employee (an employee who customarily and regularly receives more than $50 per month in tips from the same employment), use the numerical average of the hourly wage for “Bartenders,” “Waiters & Waitresses,” and “Dining Room & Cafeteria Attendants & Bartender Helpers” as defined under the Standard Occupational Classification Code and as published for Philadelphia County by the Pennsylvania DOL.Other Updates

In addition to the tipped pay clarifications, Bill Number 250065 also impacts several other paid sick leave provisions.

Nonretaliation

The law expands nonretaliation requirements to any person associated with the employer.

Employer Notice

The law removes the requirement for information in the mandatory notice to be included in a handbook.

Recordkeeping

The law increases the time that an employer must keep records of hours worked (including dates) and leave taken and paid from two to three years.

Enforcement 

An employer who is found to have violated the law may face penalties and may be required to display at their workplace a written notice that they violated the law. The law also increases the amount of time an employee may have to bring a claim to three years (previously one year) from the date the employee knew or should have known about the alleged violation. See the text of the law for further details.

Next steps

·      Check for updates to the Philadelphia Department of Labor’s FAQs, regulations and notice to employees.

·      Review and update pay policies and procedures for calculating tipped employee’s sick leave rate of pay to ensure compliance with Bill Number 250065.

·      Employees who have a calculated rate that differs from their standard rate must be paid using a Temporary Rate during the payroll input process.