This bill establishes a phased increase to the federal minimum wage, ultimately reaching $20.00 per hour with subsequent annual adjustments tied to inflation or GDP growth, while also phasing out subminimum wages for tipped employees, young new hires, and workers with disabilities.
Donald Norcross
Representative
NJ-1
The "Give America a Raise Act" significantly increases the federal minimum wage, phasing it up to $20.00 per hour over three years, followed by annual adjustments tied to CPI or GDP growth. This legislation also phases out the subminimum wage for tipped employees and workers with disabilities, ultimately requiring both groups to receive the full federal minimum wage. Furthermore, it establishes new requirements for publishing wage increase notices and eliminates the special minimum wage category for young new hires after 90 days of employment.
Give America a Raise Act Sets $20 Federal Minimum Wage and Phases Out Tipped Pay Credits
The federal minimum wage is set for its most aggressive overhaul in decades under the Give America a Raise Act. The bill mandates a four-step climb to $20.00 per hour, starting at $10.00 on day one and hitting the $20.00 mark three years later. Once the wage hits that $20.00 ceiling, it doesn’t just sit there; the Secretary of Labor will adjust it every year based on whichever is higher: inflation (CPI-U) or the growth of the economy (GDP). This means if you’re working a retail job in a town where the cost of living is spiking, your paycheck is legally required to keep pace with those rising costs.
The End of the 'Tip Credit'
For the server at your local diner or the bartender down the street, the financial landscape is shifting. Currently, many states allow a 'tip credit' where employers pay a lower base wage if tips make up the difference. This bill phases that out entirely over six years. Starting at $6.00 and climbing to $20.00, the base pay for tipped workers will eventually match the standard federal minimum. By year seven, the 'tipped minimum' is deleted from the books. If you’re a restaurant owner, this means your labor costs for front-of-house staff will more than double over the next several years, likely forcing a total rethink of menu pricing and service models.
Entry-Level Hurdles and Disability Pay
The bill handles young new hires and workers with disabilities with a 'slow-and-steady' approach. For workers under 20, employers can pay a lower rate—starting at $6.00—for the first 90 days of the job. This rate ticks up by $2.00 every year until it catches up to the standard minimum wage. Similarly, the bill ends the practice of paying workers with disabilities less than the minimum. It sets a six-year phase-in starting at $5.00 and rising to $20.00, while immediately banning the government from issuing any new certificates that allow sub-minimum wages. For a local non-profit or a specialized workshop, this transition comes with 'technical assistance' from the Department of Labor, but the reality is a steep climb in payroll expenses.
The Yearly Adjustment Reality
Perhaps the most significant long-term change is the 'auto-pilot' nature of future raises. By tying the wage to GDP or inflation (whichever is greater), the bill ensures that the minimum wage never loses its purchasing power. However, this creates a permanent variable for small business owners. Every year, at least 90 days before the new year kicks in, the Secretary of Labor will announce the new rate. Whether you’re running a construction crew or a tech startup, your biggest fixed cost—labor—will now be subject to an annual move that you can’t negotiate, only prepare for.