“To provide for increases in the Federal minimum wage, and for other purposes.”
No CRS summary available for this bill.
This section revises the federal minimum wage rates under the Fair Labor Standards Act (FLSA)—which requires most employers to pay covered employees (i.e., those engaged in commerce or employed by enterprises engaged in commerce) at least the specified hourly rate—to a new phased schedule beginning on the effective date under section 7 of the Raise the Wage Act of 2025: $9.50 an hour (from $7.25), $11.00 after one year, $12.50 after two years, $14.00 after three years, $15.50 after four years, and $17.00 after five years. It further establishes annual adjustments thereafter to reflect increases in the median hourly wage of all employees, as determined by the Secretary of Labor 90 days in advance using Bureau of Labor Statistics data (not less than the prior rate, rounded up to the nearest $0.05).
This section revises the treatment of tipped employees under the Fair Labor Standards Act (FLSA) as follows: (1) increases the minimum cash wage employers must pay tipped employees (from $2.13 per hour) to $6.00 per hour beginning on the effective date under section 7 of the Raise the Wage Act of 2025, rising in annual steps to $8.00, $10.00, $12.00, $13.50, $15.00, $17.00 after one through six years, respectively, and thereafter equal to the standard minimum wage under FLSA section 6(a)(1); (2) codifies employees' right to retain all tips received and requires employers to inform employees of this right; (3) schedules repeal of the tip credit (i.e., the lower cash wage offset by tips) effective one day after the $17.00 rate takes effect (thus requiring full cash minimum wage for all employees); (4) updates related notice requirements under FLSA section 6; and (5) enhances civil penalties under FLSA section 16 for employers who keep or use employees' tips. (As background, the FLSA tip credit allows employers to pay a sub-minimum cash wage if tips make up the difference to the $7.25 federal minimum wage.)
This section revises the subminimum wage for newly hired employees under age 20 under the Fair Labor Standards Act (FLSA)—which permits employers to pay such employees a lower rate than the standard minimum wage for their first 90 consecutive calendar days of employment—from a flat $4.25 an hour to (A) $6.00 an hour for the one-year period beginning on the effective date under section 7 of the Raise the Wage Act of 2025; (B) for each succeeding one-year period until matching the standard minimum wage under FLSA section 6(a)(1), the prior year's rate increased by the lesser of $1.75 or the amount necessary to match section 6(a)(1); and (C) thereafter, the standard minimum wage under section 6(a)(1). The section further repeals the youth subminimum wage provision—and removes related cross-references in FLSA section 6(i)—effective one day after the rate under new subparagraph (C) takes effect.
This section directs the Secretary of Labor to publish in the Federal Register and on the Department of Labor website, not later than 60 days prior to the effective date, a notice announcing any increase in required wages under (1) the general minimum wage of subsection (a)(1), (2) the youth minimum wage of subsection (g)(1)(B) or (C), (3) the tipped employee minimum wage credit of section 3(m)(2)(A)(i)(II) or (III), or (4) the special minimum wage for workers with disabilities of section 14(c)(1)(A).
This section revises the special minimum wage rates under section 14(c)(1)(A) of the Fair Labor Standards Act (FLSA)—which authorizes the Secretary of Labor to issue certificates allowing employers to pay workers with disabilities (i.e., those with impaired earning capacity) commensurate wages below the general minimum wage—to the greater of (i) a phased schedule beginning at $5.00/hour on the effective date of the Raise the Wage Act of 2025, increasing to $7.50 (one year after), $10.00 (two years), $12.50 (three years), $15.50 (four years), and the general minimum wage under FLSA section 6(a)(1) (five years); or (ii) the individual's wage rate the day before enactment. It further (1) prohibits issuance of new special certificates after enactment, (2) directs the Secretary to provide transition assistance—including technical support for employers and employment referrals for workers—to existing certificate holders upon request, and (3) terminates all special certificate authority the day after the five-year phase-in wage rate takes effect (thus ending the program). This section also amends the FLSA section 6(i) notice requirement—added by section 5 of this Act—to strike the reference to section 14(c)(1)(A), effective the day after program termination.