Compliance Watch:
Penalties for Breaking Pennsylvania Labor Laws

April 15th 2024

Pennsylvania has strong labor laws to protect workers’ rights and ensure fair business practices. Employers must comply with these laws to prevent exploitation, discrimination, and unsafe conditions. However, despite these legal safeguards, labor law violations still occur, risking the well-being of workers and damaging the reputation of non-compliant businesses.

To promote a culture of compliance and foster a fair and just working environment, it is imperative for both employers and employees to fully understand the penalties associated with breaking Pennsylvania labor laws. By shedding light on these consequences, we aim to raise awareness and encourage businesses to prioritize adherence to labor regulations, ultimately ensuring the protection and well-being of their workforce.

This Article Covers

Most Common Labor Law Violations in Pennsylvania

Penalties for Breaking Pennsylvania Labor Laws

How You Can Avoid Violating Pennsylvania Labor Laws

Most Common Labor Law Violations in Pennsylvania

Labor laws in Pennsylvania are designed to protect workers’ rights and ensure fair workplace treatment. However, despite these regulations, labor law violations still occur.

To avoid becoming a violator yourself, it’s best to learn from the most common mistakes that Pennsylvania employers make. Here are some of the most common violations in the Keystone State and how businesses may be knowingly or unknowingly committing them:

  • Wage Theft: Wage theft can manifest in various forms, such as paying less than the minimum wage, withholding overtime pay, or engaging in illegal deductions from employees’ paychecks. According to the Economic Policy Institute (EPI), Pennsylvania has one of the most severe cases of underpayment. In fact, the report from EPI found that employees are losing more than 30% of their earned pay due to wage theft.
  • Discrimination in the Workplace: Discrimination based on race, gender, age, religion, disability, or national origin, is strictly prohibited by both federal and Pennsylvania state laws. Despite these legal protections, instances of discrimination still occur. Employers may unknowingly discriminate due to a lack of awareness about discrimination laws, biases, or inadequate training programs.
  • Employee Misclassification: Employee misclassification refers to the practice of wrongly classifying workers as independent contractors instead of regular employees. This misclassification deprives workers of benefits and protections they are entitled to under employment laws, such as minimum wage and access to benefits. A 2020 annual report from the Pennsylvania Department of Labor and Industry reveals that 259,000 employees are misclassified in Pennsylvania annually. This leads to an estimated loss of $6.4 million to $124.5 million to the state’s General Fund.
  • Lack of Safety Measures: Pennsylvania law mandates that employers provide a safe working environment for their employees. Violations in this area can range from failing to implement proper safety protocols to neglecting to maintain safety equipment.
  • Penalties for Breaking Pennsylvania Labor Laws: Employers can find themselves on the wrong side of the labor law without the right knowledge of the legal landscape. To help you with compliance, this section will provide an overview of the key Pennsylvania labor laws and explain the penalties associated with breaking them.

Pennsylvania Minimum Wage Act (PMWA)

The PMWA, amended in 2006, sets a fixed minimum wage and overtime rate for employees in Pennsylvania. The minimum wage in the state stands at $7.25 per hour, the same as the federal minimum wage. There are, however, certain exemptions to this; a good example is tipped employees.

In Pennsylvania, tipped employees are defined as workers who receive over $135 per month in tips. If they meet this criterion, employers can pay them a tipped minimum wage of $2.83 per hour. But this is under the condition that their total earnings, including tips and wages, should meet or exceed the state minimum wage of $7.25 per hour. If the total falls short, the employer must compensate for the difference.

Other exceptions for the minimum wage set by PMWA are:

  • Administrative, Executive, and Professional Staff if they earn more than $150 per week.
  • Farm Laborers who work in crop production, animal husbandry, or related activities 
  • Domestic Services Providers who provide services in the employer’s home, such as cleaning, cooking, or childcare
  • Newspaper Delivery Persons who deliver newspapers or shopping news 
  • Outside Salespersons who are engaged in outside sales activities if they meet certain criteria
Penalty for Violation

Under section 12b of Pennsylvania’s Minimum Wage Act of 1968, if an employer pays an employee less than the minimum wage, they may be convicted in a summary proceeding. The penalties include a fine ranging from $75 to $300 or imprisonment for 10 to 60 days, or both. Each week an employee is underpaid, and each employee paid below the prescribed rate will be considered a separate offense.

FLSA Overtime Law

Pennsylvania follows the federal regulations outlined in the FLSA for overtime since there is no specific state law on the matter. According to the overtime regulations set by FLSA, any work exceeding 40 hours a week is considered overtime and must be paid at 1.5 times the regular pay. Overtime calculations are based on a 168-hour workweek divided into seven 24-hour periods. 

But much like the Minimum Wage law, there are also exceptions to the FLSA Overtime Law; this includes:

  • Farm Workers who are involved in crop production, animal husbandry, or related activities
  • Sailors who are employed on a vessel or boat 
  • Salespeople, Partsmen, or Mechanics who primarily deal with vehicles, such as cars or trucks.
  • Taxi Drivers who drive taxis or other passenger vehicles 
  • Motion Picture Theater Workers 
  • Executive, Administrative, and Professional Employees who earn more than a certain amount per week

Learn more in detail about Pennsylvania Overtime Laws.

Penalty for Violation

Employers knowingly or repeatedly breaking minimum wage or overtime pay laws may face a civil penalty of up to $1,000 per violation. Willful violations of the FLSA can lead to criminal prosecution, resulting in fines of up to $10,000. A second conviction may result in imprisonment.

Family Medical Leave Act

The Family and Medical Leave Act (FMLA) is a vital federal law that regulates time off from work. It grants eligible employees up to 12 weeks of unpaid leave for important family and medical reasons, including childbirth or adoption and caring for a seriously ill family member. Employers must continue providing health benefits during the leave and reinstate employees to their previous or equivalent positions when they return to work.

Penalty for Violation

The Wage and Hour Division enforces the FMLA for private, state, and local government employees, as well as some federal employees. If violations cannot be resolved satisfactorily, the US Department of Labor may take legal action to ensure compliance. If the court rules in favor of the complainant, employers may be required to grant FMLA leave and provide monetary damages, including attorney fees and court costs.

​Child Labor Act 

According to Pennsylvania’s Child Labor Act, minors can start working at 14. Minors under 16 years old will need written permission from a parent or legal guardian to work. If minors under 18 want to perform in live shows or broadcasts, they must get approval from a state agency.

Pennsylvania’s Child Labor Act also includes a list of occupations deemed too hazardous for minors. Some prohibited jobs for minors in Pennsylvania include brickmaking, crane operation, electrical work, excavation, forest firefighting, millwork, meat processing, welding, and so on.

Aside from occupations, the working hours for minors in Pennsylvania are regulated too. For example, those under 16 are only allowed to work 3 hours on a school day. If school is not in session, this increases to no more than 40 hours per week.

Penalty for Violation

Violating the Child Labor Law in Pennsylvania has consequences. The first offense can result in a fine of up to $400; a second offense can cost between $750 and $1,500. These fines can go even higher if children are put in dangerous jobs, resulting in injury or death. In the case of a Pennsylvania McDonald’s Franchise, the court ordered the employer to pay $92,000 in penalties after assigning nine workers under age 16 to operate deep fryers.

Additionally, disobeying child labor laws may lead to a jail term of up to 10 days, as determined by the court.

Pennsylvania Construction Workplace Misclassification Act (Act 72)

Misclassifying construction workers as independent contractors instead of employees is a common issue among employers in the state. The Construction Workplace Misclassification Act 43 PS § 933.1 in Pennsylvania sets clear criteria for determining independent contractor status. This law specifically forbids the misclassification of employees as independent contractors in both commercial and residential construction throughout the state.

According to Act 72, to be considered a contractor instead of an employee, the person must have previously done similar work independently or advertised their availability to perform such services independently. They must also have liability insurance of at least $50,000.

Penalty for Violation

Act 72 imposes penalties, both criminal and administrative, on employers, as well as their officers or agents, who misclassify workers. It also authorizes the Secretary of Labor & Industry to seek a court order to halt work, partially or completely, at a site where intentional misclassification is occurring.

If an employer, or their officer or agent, negligently fails to classify an individual as an employee correctly, they commit a summary offense. Upon conviction, they may be fined up to $1,000 and up to $2,500 for each subsequent violation.

Pennsylvania Sexual Harassment Laws

There are federal and state laws in place in Pennsylvania to protect employees from sexual harassment in the workplace. Here’s a look at some of those laws:

  • Title VII of the Civil Rights Act of 1964 prohibits workplace discrimination based on race, gender, nationality, religion, or color. Employers must investigate complaints and take action. In 2020, the Supreme Court extended the law’s protection to sexual orientation and transgender status.
  • The Pennsylvania Human Relations Act of 1955 prohibits discriminatory practices based on race, religion, age, national origin, disability, family status, and ancestry. The law establishes the Pennsylvania Human Relations Commission (PHRC) to handle sexual harassment complaints in and out of the workplace.
  • The Crime Victims’ Rights Act protects individuals facing sexual harassment in federal criminal cases. It ensures the right to reasonable protection and the right to be heard.
Penalty for Violation

Each of these laws carries its own penalties for violators. But in general, when an investigation determines that an employee has engaged in sexual harassment, the employer can take disciplinary action. The severity of the misconduct will determine the appropriate consequences, which may include:

  • Warnings or reprimands
  • Required training and counseling
  • Transfers or demotions
  • Salary reductions
  • Suspensions or terminations

The Whistleblower Law

The Whistleblower Law in Pennsylvania safeguards public workers who report potential violations of state or federal regulations. Employers cannot retaliate, terminate, or intimidate whistleblowers as long as they act in good faith. The Office of State Inspector General (OSIG) enforces this protection by investigating reported violations.

Penalty for Violation

A whistleblower who experiences retaliation can seek financial compensation from the employer. This includes lost wages and benefits, emotional distress damages, punitive damages, and legal expenses.

Record-Keeping Laws

In Pennsylvania, employers must maintain accurate and permanent records of their employees. These records should be kept for a minimum of 7 years and stored in an easily accessible location for inspections. The required information includes:

  • Employee’s name and address
  • Social security number
  • Gross earnings per pay period before deductions
  • Dates and amounts of wages paid
  • Dates of recruitment, re-employment, layoff, or dismissal
  • Dates of absences
  • Type of services provided by the employee
  • Additional compensation or benefits received, apart from regular salary

These records play a very important role in settling workplace disputes. They can also serve as proof for court cases.

Penalty for Violation

Employers who intentionally violate these requirements may be fined $50 to $200. If the fine remains unpaid, they could be imprisoned for 30 to 60 days. Each day of noncompliance is considered a separate violation.

The same penalties apply if employers discriminate or retaliate against employees for reporting possible violations to the Pennsylvania Department of Labor and Industry (PDOLI).

How You Can Avoid Violating Pennsylvania Labor Laws

Employers must take proactive steps to ensure compliance with labor laws in Pennsylvania and avoid violations that could lead to legal consequences. Here are some important steps to take to avoid violating Pennsylvania labor laws:

Tip #1 Know and understand key labor laws

Familiarize yourself with the federal and state labor laws that apply to your business, including the Pennsylvania Minimum Wage Act, the Fair Labor Standards Act (FLSA), and other relevant statutes.

Laws and regulations are constantly changing. For example, there’s a proposal to gradually raise the minimum wage to $15 per hour by July 1, 2028. So aside from knowing these laws, it’s also important to stay up to date with any changes or updates to ensure compliance.

Tip #2 Classify employees correctly

Properly classify your workers as either employees or independent contractors. Understand the criteria that determine employee status, such as the level of control you exert over their work, the nature of the work relationship, and the degree of independence. Misclassifying employees can snowball into a host of violations that lead to hefty penalties.

Tip #3 Maintain accurate records

Keep thorough and accurate records of hours worked, wages paid, deductions made, and other relevant employment information. This includes maintaining records of employees’ names, addresses, social security numbers, and employment dates. Accurate record-keeping protects both employees and employers, and it’s key to more accurate payroll. To streamline the process of time tracking and recordkeeping, it’s recommended to use a reliable time tracking software.

Tip #4 Create and enforce anti-retaliation policies

Establish policies that protect employees from retaliation when they report labor law violations or participate in investigations. You also need help supervisors and managers understand and respect these policies and promptly address any instances of retaliation. Encourage an open and supportive work culture where employees feel safe reporting violations.

Tip #5 Stay informed and seek guidance

Labor laws can be complex and subject to changes. Stay informed about any updates or amendments to labor laws in Pennsylvania. Consider consulting with employment attorneys, human resources professionals, or labor law experts to ensure your business practices are in line with the latest legal requirements.

By proactively educating yourself, implementing robust policies, and maintaining compliance with labor laws, you can create a fair and respectful work environment while minimizing the risk of violating Pennsylvania labor laws.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.

Learn more about Pennsylvania Labor Laws through our detailed guide.