Sponsors
The bill raises and indexes minimum wages to substantially increase and protect earnings for low‑wage, tipped, youth, and disabled workers while simplifying pay rules — but it also imposes higher labor costs and transitional compliance burdens that may pressure small businesses, reduce some entry‑level opportunities, and increase public program and taxpayer costs.
Low-wage workers — including tipped workers, young workers, and many workers with disabilities — will receive steadily higher pay as the federal minimum is phased up (to $20/hr for most workers within three years and with parallel phase-ins for tipped, youth, and disability-paid workers).
Low-wage workers — broadly — gain protection against inflation because the minimum wage will be indexed annually to CPI‑U or GDP growth, preserving purchasing power over time.
Tipped service employees will get higher guaranteed cash pay over time and an explicit legal right to keep their tips, improving take-home earnings, reducing tip-poaching, and increasing pay transparency.
Small businesses and employers (especially restaurants, bars, and small program providers) will face materially higher labor costs that may lead them to raise prices, cut hours, reduce hiring, lay off workers, or accelerate automation, affecting workers and consumers.
Teens, young adults, and inexperienced jobseekers may face fewer entry-level opportunities and training positions as employers respond to higher entry wages by hiring fewer or favoring more experienced applicants.
Programs and employers that rely on special certificates to employ people with disabilities may reduce hours, close programs, or lose viability, risking job losses and fewer supported employment placements for disabled workers.
Based on analysis of 7 sections of legislative text.
Introduced February 4, 2026 by Ruben Gallego · Last progress February 4, 2026
Phases up the federal minimum wage to $20.00 per hour over several years, sets annual future increases tied to inflation or GDP, raises the cash minimum for tipped workers to parity, increases the youth subminimum wage until it equals the general minimum, and phases out most subminimum wages paid under the disability certificate program while banning new certificates. The Department of Labor must publish advance notice of scheduled increases and provide transition assistance related to the disability wage changes.