Sponsors (3)
The bill shifts minimum and subminimum wages to reflect local cost-of-living—boosting pay and predictability for workers in expensive areas (including many tipped employees) while imposing higher labor costs and substantial compliance complexity on employers and leaving some workers in low-cost areas or certain age groups worse off.
Low-income workers (including tipped employees and newly hired younger workers) in high-cost metropolitan areas will receive higher minimum and subminimum pay because area wages scale with local cost-of-living (applies to general minimums, tipped cash-wage floors, and two‑thirds subminimum formulas).
Tipped workers gain a higher base cash wage that automatically adjusts with local FLSA minimums, giving more predictable, regionally responsive cash pay for tipped occupations.
Workers in lower-cost nonmetropolitan areas are protected from sudden reductions in pay because a 3‑year floor ties applicable wages to the prior period's wage if that is larger, softening abrupt declines in local rates.
Small businesses (especially restaurants/bars) in higher-cost areas will face higher labor costs, which could lead to reduced hiring, fewer hours, or higher consumer prices.
Employers and government agencies will face substantially greater administrative and compliance burdens from area-by-area calculations, frequent data updates, metropolitan/nonmetropolitan aggregation rules, and multi-location rate tracking.
Some workers in low-cost areas or newly hired employees could end up with lower federal minima or lower starting pay (if local two‑thirds floors fall below prior federal rates or the $4.25 reference), reducing earnings for those populations.
Based on analysis of 5 sections of legislative text.
Replaces a single federal minimum wage with area-specific minimums tied to BLS wages and BEA regional price parity and revises tipped and youth subminimum formulas.
Introduced May 15, 2025 by Brian K. Fitzpatrick · Last progress May 15, 2025
Replaces the single federal hourly minimum wage with area-specific minimums based on recent BLS average wages and BEA regional price parity, and phases their application over time. It also ties the tipped cash-wage to 30% of the local minimum, changes the floor for certain newly hired employees to two-thirds of the local minimum, and narrows age language for a youth exception. All changes take effect on the first day of the third month after enactment.