Sponsor
Ruben Gallego
Senator · D-AZ
Senator · D-AZ
The bill substantially raises and indexes wages to restore purchasing power and extend pay equity to tipped workers, youth, and many workers with disabilities, but does so at the cost of higher operating burdens and labor costs that could push businesses to cut hiring, raise prices, or alter programs serving vulnerable workers.
Most low-wage workers — including those on the general minimum, tipped workers, youth, and many workers with disabilities — will see phased increases in hourly pay up to $20 and stronger indexing, substantially raising take-home pay for millions.
Wage increases are paired with annual indexing to CPI‑U or real GDP and scheduled phase-ins, giving workers and households more predictable, inflation‑protected income over time.
Tipped workers gain higher guaranteed cash wages, an explicit right to retain tips, and eventual equal base pay when the tipped wage equals the general minimum, reducing tip dependence and improving pay transparency.
Small and medium employers across sectors face substantially higher labor costs, which could force reduced hiring, cut hours, accelerate automation, or cause business closures affecting local employment.
Consumers — especially middle‑class households — may see higher prices for goods and services as businesses pass wage costs onto customers, increasing the cost of living.
Entry‑level job opportunities may decline (substitution toward older or more skilled workers, fewer entry-level openings, or automation), reducing paths for teens, inexperienced workers, and the long‑term unemployed to get jobs.
Based on analysis of 7 sections of legislative text.
Phases the federal minimum wage to $20/hr, phases out tipped/youth/disability subminimums, and requires annual indexing to CPI‑U or real GDP.
Official title: Provide for increases in the Federal minimum wage, and for other purposes.
Introduced February 4, 2026 by Ruben Gallego · Last progress February 4, 2026
Raises the federal minimum wage in stages to $20.00 per hour over a three-year schedule, then requires annual automatic adjustments based on inflation (CPI‑U) or real GDP growth. Phases out lower subminimum wages by raising and ultimately eliminating the separate cash minimum for tipped workers, the youth (training/new-hire) subminimum, and special certificates for workers with disabilities, while requiring the Department of Labor to publish notices and provide transition assistance.