Fair Wage Act of 2025

This bill would set the federal minimum wage based on where you work and how expensive that area is. The rate would be set for each metro area and for the non‑metro parts of each state. It would use a formula tied to the national average hourly pay for private, non‑supervisory workers, adjusted for local prices, and rounded to the nearest 10 cents. It starts at 40% of that national average, then rises to 45% after one year and 50% after two years. Every five years, and then every three years after that, the rate is reset and cannot drop below the prior period. The local price adjustment ranges from 87.5% in less expensive places to 115% in very expensive places, based on a federal cost‑of‑living measure for each area.

Tipped workers would have to be paid a cash wage equal to at least 30% of the local minimum wage. Employers could pay newly hired workers who are 18 or younger at least two‑thirds of the local minimum; the law’s age limits are updated from “under 20” to “18 or younger,” and from “25” to “24 or younger”. These changes would start on the first day of the third month after the bill becomes law.

• Who is affected: Workers paid minimum wage, tipped workers, newly hired teens 18 or younger, and employers nationwide.
• What changes: The minimum wage varies by area, tied to national average pay and local prices, with adjustments from 87.5% to 115% based on cost of living.
• When: Takes effect the first day of the third month after it becomes law.