Living Wage For All Act (H.R. 8555)

Summary

Raises the federal minimum wage in steps to $25 per hour and then ties it to the national average wage, ending all lower wages for certain workers.

What problem does this solve?

Many workers earn a minimum wage that is too low to cover basic living costs. This bill raises the wage to $25 per hour and links it to the national average pay to ensure it keeps up.

What does this bill do?

Raises minimum wage to $25 for large employers

Sets a schedule for large employers (over $1B revenue or 500 employees) to increase their minimum wage to $25 per hour by January 1, 2031.

Provides a slower wage increase for other employers

Gives smaller employers a longer timeline to raise their minimum wage, reaching $25 per hour by January 1, 2038.

Ties minimum wage to the national median wage

After reaching the target wage, adjusts the minimum wage annually to equal two-thirds of the national median hourly wage, ensuring it keeps pace with the economy.

Eliminates the tipped subminimum wage

Phases out the lower cash wage for tipped workers, requiring all employers to eventually pay them the full standard minimum wage before tips.

Ends the youth subminimum wage

Repeals the provision allowing employers to pay workers under the age of 20 a lower wage for their first 90 days of employment.

Phases out the subminimum wage for workers with disabilities

Stops issuing new special certificates that allow employers to pay workers with disabilities less than the minimum wage and phases out existing ones.

Requires minimum wage for incarcerated workers

Defines incarcerated individuals who perform work as employees under the Fair Labor Standards Act, making them eligible for the federal minimum wage.

Who does this affect?

Low-wage workers
Employers
Workers in subminimum wage categories

What is the real world impact?

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Ensures a living wage for all workers

Aims to align the federal minimum wage with the actual cost of living, reducing poverty and reliance on public assistance for working families.

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Promotes pay equity

Eliminates subminimum wages for tipped employees, youth workers, workers with disabilities, and incarcerated individuals, ensuring these groups are paid the full minimum wage.

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Potential economic consequences

Critics may argue that a rapid increase to a $25 minimum wage could lead to higher prices for consumers, reduced hiring, or automation as businesses adjust to increased labor costs.

When does this start?

The wage increases begin on January 1, 2026, with different schedules for large and small employers that phase in over several years.

Initial wage increase

On January 1, 2026, the minimum wage for all employers increases to $12.00 per hour.

Large employer deadline

Large employers must pay a minimum wage of $25.00 per hour beginning January 1, 2031.

Other employer deadline

All other employers must pay a minimum wage of $25.00 per hour beginning January 1, 2038.

Tipped wage phase-out for large employers

The tipped minimum wage for large employers reaches the full standard minimum wage five years after the bill's effective date.

Prohibition on new disability wage certificates

The Secretary of Labor is prohibited from issuing new special certificates for subminimum wages for workers with disabilities starting on the date the act is passed.