Raise the Wage Act of 2025
- Bill Number
- H.R. 2743
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2025-04-08: Referred to the House Committee on Education and Workforce.
- Last Updated
- 2026-06-11T05:06:21Z
AI-Generated Summary
Purpose of the Legislation
The Raise the Wage Act of 2025 aims to raise the federal minimum wage for most workers in the United States through a series of scheduled increases, while also eliminating or phasing out lower wage rates for specific groups like tipped employees, young workers, and those with disabilities. It seeks to tie future wage adjustments to economic data for ongoing fairness.
Key Provisions
- General Minimum Wage Increases: The base federal minimum wage under the Fair Labor Standards Act (FLSA, a 1938 law setting basic labor standards like minimum pay) would rise in steps over six years starting from the effective date (first day of the third month after enactment):
- Year 1: $9.50 per hour
- Year 2: $11.00 per hour
- Year 3: $12.50 per hour
- Year 4: $14.00 per hour
- Year 5: $15.50 per hour
- Year 6: $17.00 per hour
- After Year 6: Adjusted annually based on the median hourly wage of all U.S. workers (calculated by the Department of Labor using Bureau of Labor Statistics data), rounded up to the nearest $0.05, but not below the prior rate.
- Tipped Employees: Employers must pay a cash wage that increases in steps to $17.00 per hour by Year 6, after which it matches the full minimum wage. All tips must go directly to the employee (no sharing with employers or managers), and employers must inform workers of this right. The separate lower wage for tipped workers ends one day after the $17.00 cash wage takes effect.
- Young Workers (Under 20 Years Old): For newly hired employees under 20, the training wage starts at $6.00 per hour in Year 1 and increases by up to $1.75 annually until it matches the full minimum wage. This separate youth rate is repealed one day after it reaches the full minimum.
- Workers with Disabilities: Under special certificates allowing subminimum wages (often for sheltered workshops), the minimum rises in steps to match the full minimum wage by Year 5. No new certificates can be issued after enactment, but existing ones get transition assistance (like technical help from the Department of Labor to comply and maintain jobs). The entire certificate program sunsets (ends) one day after the full minimum takes effect for these workers.
- Public Notices: The Department of Labor must publish wage increase announcements in the Federal Register and on its website at least 60 days before they start, covering all affected wage types.
- Penalties: Strengthens enforcement by adding penalties for employers who keep or use employees' tips improperly.
Significant Changes to Existing Law
- From Current $7.25 Minimum: The general minimum wage, unchanged since 2009, would more than double over six years and then automatically adjust yearly based on median wage growth (a new indexing mechanism not in prior law).
- Elimination of Subminimum Wages: Fully repeals lower rates for tipped workers (previously $2.13 cash wage plus tips), youth trainees (previously $4.25), and disability certificates (previously allowed wages as low as 14 cents per hour in some cases), phasing them out over 5-6 years to ensure all covered workers earn the full minimum.
- Tip Protections: Removes employer claims to tips and mandates direct retention by workers, closing loopholes in the FLSA's tip credit system (where employers could offset low cash wages with expected tips).
- No New Exceptions: Prohibits issuing new special wage certificates for disabled workers, shifting focus to competitive employment with support services.
Potential Impacts
- On Citizens: Low-wage workers (about 1.3 million currently at $7.25) would see pay raises, potentially lifting millions out of poverty and boosting consumer spending. However, it could lead to higher prices in industries like food service or retail. Tipped and young workers gain protections against exploitation, while disabled workers transition to fairer pay but may face job disruptions without adequate support.
- On Government Agencies: The Department of Labor gains responsibilities for annual wage calculations, publishing notices, and providing transition assistance to employers of disabled workers, increasing administrative workload and costs.
- On Businesses: Small businesses and those in tipped sectors (e.g., restaurants) face higher labor costs, possibly leading to reduced hiring, automation, or closures in low-margin industries. Larger firms may absorb costs more easily.
- On International Relations: No direct impacts; this is a domestic labor policy.
Main Stakeholders Affected
- Workers: Primarily low-income employees, tipped service workers (e.g., servers), new hires under 20, and individuals with disabilities in sheltered employment—potentially benefiting over 20 million workers through higher pay and tip rights.
- Employers: Businesses relying on minimum-wage labor, especially small enterprises, restaurants, and nonprofits employing disabled workers, who must adjust payrolls and operations.
- Government: U.S. Department of Labor (for enforcement and data analysis) and state labor agencies (which may align with federal changes).
- Advocacy Groups: Labor unions and disability rights organizations, which pushed for these reforms to promote equity.
Notable Legal, Constitutional, or Political Implications
- Legal: Enhances FLSA enforcement by clarifying tip rules and adding penalties, reducing loopholes that allowed wage theft. The phase-out of subminimum wages could face lawsuits from employers claiming operational burdens, but it aligns with existing federal authority over interstate commerce wages.
- Constitutional: No major challenges expected; minimum wage laws have been upheld by the Supreme Court since 1937 as valid economic regulation under the Commerce Clause (part of the Constitution allowing Congress to regulate business affecting national trade).
- Political: Introduced by over 100 House Democrats, it reflects progressive priorities on income inequality but may spark debate over economic effects like inflation or job losses. Passage would require Senate approval and could influence midterm elections by highlighting wage policy divides.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Scott, Robert C. "Bobby" [D-VA-3]
Cosponsors (172)
Rep. Casar, Greg [D-TX-35], Rep. Hayes, Jahana [D-CT-5], Rep. McBath, Lucy [D-GA-6], Rep. Moore, Gwen [D-WI-4], Rep. Beyer, Donald S. [D-VA-8], Rep. Mrvan, Frank J. [D-IN-1], Rep. Ross, Deborah K. [D-NC-2], Rep. Takano, Mark [D-CA-39], Rep. Tokuda, Jill N. [D-HI-2], Rep. McCollum, Betty [D-MN-4], Rep. Panetta, Jimmy [D-CA-19], Rep. Boyle, Brendan F. [D-PA-2], Rep. Cleaver, Emanuel [D-MO-5], Rep. Schneider, Bradley Scott [D-IL-10], Rep. Underwood, Lauren [D-IL-14], Rep. Pingree, Chellie [D-ME-1], Rep. Kelly, Robin L. [D-IL-2], Rep. Keating, William R. [D-MA-9], Rep. Tonko, Paul [D-NY-20], Rep. Trahan, Lori [D-MA-3], Rep. Foster, Bill [D-IL-11], Rep. Tlaib, Rashida [D-MI-12], Rep. Johnson, Henry C. "Hank" [D-GA-4], Rep. Lynch, Stephen F. [D-MA-8], Rep. Castro, Joaquin [D-TX-20], Rep. Ivey, Glenn [D-MD-4], Rep. DeGette, Diana [D-CO-1], Rep. Schakowsky, Janice D. [D-IL-9], Rep. Sherrill, Mikie [D-NJ-11], Rep. Moulton, Seth [D-MA-6], Rep. Norcross, Donald [D-NJ-1], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Carbajal, Salud O. [D-CA-24], Rep. Khanna, Ro [D-CA-17], Rep. Williams, Nikema [D-GA-5], Rep. Garamendi, John [D-CA-8], Rep. Fields, Cleo [D-LA-6], Rep. Ocasio-Cortez, Alexandria [D-NY-14], Rep. Budzinski, Nikki [D-IL-13], Rep. Quigley, Mike [D-IL-5], Rep. Ramirez, Delia C. [D-IL-3], Rep. Thompson, Mike [D-CA-4], Rep. Casten, Sean [D-IL-6], Rep. Menendez, Robert [D-NJ-8], Rep. Horsford, Steven [D-NV-4], Rep. McGarvey, Morgan [D-KY-3], Rep. Bonamici, Suzanne [D-OR-1], Rep. Omar, Ilhan [D-MN-5], Rep. Titus, Dina [D-NV-1], Rep. Vargas, Juan [D-CA-52] and 122 more
Recent Actions
- 2025-04-08: Referred to the House Committee on Education and Workforce.
- 2025-04-08: Introduced in House
- 2025-04-08: Introduced in House
Bill Versions
- Raise the Wage Act of 2025 — issued 2025-04-08 — PDF (13 pages)