Pennsylvania Minimum Wage 2026: State Rate, Philadelphia, and Tipped Workers

Pennsylvania’s minimum wage situation is straightforward in most of the state — and a notable exception in Philadelphia. While the state rate has been frozen at $7.25/hr for over 15 years, political discussions about raising it surface regularly. This guide gives you the current facts, explains the local landscape, and covers what you actually need to do as an employer.

1. Pennsylvania State Minimum Wage: $7.25/hr

The Pennsylvania state minimum wage in 2026 is $7.25 per hour, identical to the federal minimum wage established by the Fair Labor Standards Act (FLSA). Because Pennsylvania law ties the state minimum to the federal rate and has not passed an independent increase, the state and federal rates have been identical since July 2009.

2. Why PA Has Not Raised Its Minimum Wage Since 2009

Pennsylvania has one of the longest minimum wage freezes among U.S. states. The General Assembly has not passed a minimum wage increase since 2006 (which took effect in 2007–2009 in stages). Multiple bills have been introduced over the years, and gubernatorial administrations have repeatedly called for increases, but the legislature has not acted.

The political landscape in Pennsylvania — a state that often splits between rural conservative areas and urban progressive centers — has made statewide minimum wage increases difficult to pass. As of early 2026, no legislation to increase the minimum wage appears imminent, though the political discussion continues.

3. Philadelphia Minimum Wage: $15.00/hr

The City of Philadelphia has exercised its authority to set a higher minimum wage than the state floor for employees working in the city. As of 2026, the Philadelphia minimum wage is $15.00 per hour for covered employees.

Who Is Covered

Philadelphia’s minimum wage ordinance applies to most employees who perform work within the city limits. The key factors:

• The higher rate applies based on where the employee works, not where the employer is headquartered. An employer based in the suburbs must pay $15/hr for any work performed in Philadelphia.
• There are some exemptions and nuances, particularly for certain categories of workers. Consult the Philadelphia Department of Labor for complete details on covered and excluded employees.
• The $15/hr rate may be subject to future increases; Philadelphia has expressed intent to index the rate over time. Verify the current rate with the City of Philadelphia before setting wages for Philadelphia-based employees.

Philadelphia Tipped Workers

Philadelphia also has specific rules about tipped employees. The interaction between the city’s $15/hr minimum and the state’s $2.83/hr tipped minimum is an area where you should verify current city policy, as the rules for tipped employees in Philadelphia may differ from statewide rules.

4. Pittsburgh: The Failed Local Minimum Wage Attempt

Pittsburgh attempted to set its own minimum wage above the state rate, passing a local ordinance that would have raised the minimum wage for Pittsburgh workers. However, Pennsylvania’s courts struck down this ordinance, ruling that state law preempts municipalities from setting minimum wage rates above the state minimum — with an exception for Philadelphia, which has a separate charter-based authority that Pittsburgh does not share.

This means that outside of Philadelphia, Pennsylvania municipalities cannot legally set a local minimum wage above the $7.25/hr state rate. The Pittsburgh ordinance was invalidated, and the state rate of $7.25/hr applies throughout Pittsburgh and all other Pennsylvania municipalities except Philadelphia.

5. Tipped Workers: $2.83/hr Minimum

Pennsylvania law permits a lower cash wage for tipped employees — defined as employees who customarily and regularly receive more than $135 per month in tips. The minimum cash wage for tipped employees in Pennsylvania is $2.83 per hour.

The Tip Credit

The difference between the tipped minimum cash wage ($2.83/hr) and the regular minimum wage ($7.25/hr) is called the tip credit — currently $4.42/hr. This means:

• You may pay tipped employees a cash wage as low as $2.83/hr.
• The employee’s tips must cover the remaining $4.42/hr to bring total compensation to at least $7.25/hr.
• If an employee’s tips in any workweek are insufficient to bring their total hourly earnings to $7.25/hr, you must pay the difference. The minimum wage guarantee is non-negotiable.

Requirements for Using the Tip Credit

• The employee must qualify as a tipped employee (regularly receiving more than $135/month in tips).
• You must inform the employee in advance that you are applying the tip credit — both the tip credit amount and the amount of tips received.
• The employee must retain all tips, except for valid tip pooling arrangements.
• You must track tips and verify that the $7.25/hr floor is met every workweek — not just on average over a longer period.

Tip Pooling

Pennsylvania law permits tip pooling arrangements where tipped employees share tips among themselves. However, employers, managers, and supervisors may not participate in tip pools. Employers using the tip credit must be especially careful about tip pooling arrangements to ensure compliance.

6. Youth and Training Wages

Pennsylvania law allows certain limited exceptions to the minimum wage for specific categories of workers:

Student Learner Certificate

The Pennsylvania Department of Labor & Industry may issue permits allowing employers to pay student learners a reduced wage during periods of vocational training as part of a bona fide educational program. This is a narrow exception with specific paperwork and program requirements.

Federal Youth Minimum Wage

Under federal law (FLSA), employers may pay employees under 20 years old a youth wage of $4.25/hr for the first 90 calendar days of employment. This federal provision applies in Pennsylvania, though it is rarely used in competitive labor markets where starting wages far exceed the minimum anyway.

No General Subminimum Wage for Teenagers

Pennsylvania does not have a blanket “teen wage” or “training wage” below the federal minimum for general use. Outside of the specific programs above, all employees must be paid at least $7.25/hr ($15/hr in Philadelphia).

7. Overtime and Minimum Wage Interaction

Overtime pay requirements interact with minimum wage rules in important ways, particularly for tipped employees and salaried workers:

• Hourly employees: Overtime is calculated at 1.5 times the regular rate of pay for all hours over 40 in a workweek. The overtime rate must also be at least 1.5 times the applicable minimum wage.
• Tipped employees: Overtime is calculated based on the full minimum wage ($7.25/hr), not the reduced tipped wage. The overtime rate for tipped employees is $10.88/hr (1.5 × $7.25), minus the applicable tip credit. This means the minimum cash wage for tipped employees working overtime is $6.46/hr ($10.88 − $4.42 tip credit), assuming tips cover the credit.
• Salaried exempt employees: The FLSA requires a minimum salary of $684/week ($35,568 annually) for most salaried exempt employees under federal law. Pennsylvania does not have a higher state threshold as of 2026.

For a comprehensive guide to overtime rules, see our Pennsylvania Overtime and FLSA guide.

8. Employer Compliance: What You Must Do

Post the Required Notice

Pennsylvania employers must post the Pennsylvania Minimum Wage Law poster in a visible location where employees can see it. This poster summarizes minimum wage requirements, tip credit rules, and overtime rights. Free copies are available from the PA Department of Labor & Industry.

Track All Hours Worked

Accurate timekeeping is the foundation of minimum wage compliance. You must track all hours worked — including short breaks, pre- and post-shift duties, and any other time the employee is engaged in work. Missed hours that push employees below the minimum wage floor are a compliance violation.

Verify Tipped Employee Minimums Weekly

If you have tipped employees, run a weekly check to ensure that (cash wages paid + tips received) ÷ hours worked ≥ $7.25/hr. If any workweek falls short, you must pay the make-up amount with that week’s paycheck.

Keep Records

Pennsylvania law requires employers to keep payroll records sufficient to demonstrate compliance with minimum wage and overtime requirements. Records should include hours worked each day and workweek, the basis of wage payment, and total wages paid. Retain these records for at least three years under Pennsylvania law (IRS requirements may dictate longer retention for other purposes).

9. Frequently Asked Questions

Is Pennsylvania going to raise its minimum wage in 2026?

As of February 2026, no legislation to raise Pennsylvania’s state minimum wage has passed. The governor has supported increases, but the General Assembly has not acted. Monitor the PA General Assembly’s website for legislative updates if this is a business planning concern for you.

Do I have to pay Philadelphia’s $15/hr minimum if my business is located outside the city?

The Philadelphia minimum wage applies based on where the employee works, not where your business is located. If an employee performs work in Philadelphia — even for a limited portion of their workweek — the $15/hr rate applies to those hours. For employees who split time between Philadelphia and other locations, you may need to apply different rates for different portions of their pay.

What is the penalty for paying below minimum wage in Pennsylvania?

The Pennsylvania Department of Labor & Industry can investigate wage complaints and require back pay for the difference between what was paid and the minimum wage owed, plus interest. Employees can also file private lawsuits for unpaid wages under the Pennsylvania Wage Payment and Collection Law, which allows recovery of unpaid wages plus liquidated damages and attorney fees. Federal FLSA violations add another layer of potential liability.

Do salaried employees have minimum wage protections?

Yes. Salaried non-exempt employees must still be paid at least the equivalent of minimum wage for all hours worked in a workweek. If a salaried non-exempt employee works 60 hours in a week, they must receive overtime pay AND their total compensation must average at least $7.25/hr across all hours worked.