Labor Income Fairness and Transparency Act

This bill raises the federal minimum wage in steps: $10.25 one year after it becomes law, $13.75 one year later, and $17.00 after two years. After three years, it will adjust every year based on the typical (median) wage, can’t go down, and is rounded to the nearest 5 cents . It also phases out subminimum wages for youth, students, and workers with disabilities by setting higher floors each year and ending new special certificates after three years. For tipped workers, the required cash wage from employers rises to $7.09, then $12.05, then $17.00 before matching the full minimum; workers keep their tips, managers can’t take them, and employers must give daily tip notices.

The bill strengthens enforcement and support. It increases civil penalties for wage violations (starting 120 days after enactment) and blocks layoffs of federal Wage and Hour investigators through reductions in force. It funds State, local, and Tribal efforts to enforce wage laws and educate workers and employers. It also creates a national advisory committee to help the Labor Department address hospitality industry issues like tipped work and safety. Finally, it makes the pandemic-era Earned Income Tax Credit improvements permanent for workers without children at home: lowers the minimum age (generally to 19, with special rules for students, former foster youth, and homeless youth), removes the upper age limit, and increases credit amounts and thresholds starting with the 2026 tax year.

Key points

• Who is affected: workers paid at or near the minimum wage; tipped workers; youth, students, and people with disabilities; hospitality workers; low-wage workers eligible for the EITC; plus employers and State, local, and Tribal governments .
• What changes: higher federal minimum wage with annual indexing; stronger tip protections; phase-out of subminimum wages and end to new special certificates; higher penalties and protected enforcement staffing; grants for wage-law enforcement and education; new hospitality advisory committee; permanent EITC enhancements for workers without children at home .
• When: most wage changes start one year after enactment; civil penalties increase after 120 days; EITC changes apply to tax years after December 31, 2025; annual indexing begins after the $17 step (three years after enactment) .