Living Wage For All Act
- Sponsor
- Rep. Ramirez, Delia C. [D-IL-3]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Apr 28, 2026
Bottom line
The Living Wage For All Act aims to establish a federal minimum wage that is a living wage, indexed to the national median, while eliminating all subminimum wage categories and extending protections to incarcerated workers.
What it actually does
This bill significantly raises the federal minimum wage to $25 per hour, phased in over several years, with large employers facing a faster schedule than other employers. It then indexes the minimum wage to two-thirds of the national median hourly wage. Crucially, the bill phases out all subminimum wages for tipped employees, youth workers, and workers with disabilities, and extends federal minimum wage protections to incarcerated workers, prohibiting deductions for board, lodging, or court-imposed fees.
Proponents argue
Proponents argue that the bill is a critical step to ensure that all work pays a living wage, aligning the federal minimum wage with the actual cost of living and strengthening economic security for millions of low-wage workers. They contend that this will reduce poverty, decrease reliance on public assistance, and stimulate broad-based economic growth by increasing consumer purchasing power. The differentiated phase-in for large corporations is seen as a fair approach, requiring those with the greatest capacity to lead the transition.
Opponents contend
Opponents contend that such a substantial and rapid increase in the minimum wage, coupled with indexing, would lead to significant job losses, particularly in industries with thin margins and in regions with lower costs of living. They argue it would force businesses, especially small and medium-sized enterprises, to cut staff, reduce hours, or automate jobs, potentially leading to price increases that could fuel inflation. Furthermore, the elimination of subminimum wages is argued to reduce employment opportunities for specific vulnerable groups.
The bill is moderately complex due to its phased-in schedules and indexing mechanisms, but its core provisions are clearly laid out. A careful reading is necessary to grasp the nuances of its implementation.
Section 4(a), amending FLSA Section 6(a)(1)
Federal Minimum Wage Increase and Differentiated Schedule
This provision establishes a new federal minimum wage schedule, increasing it to $25 per hour. It creates two distinct phase-in timelines: large employers (those with $1 billion+ in annual revenue or 500+ employees) must reach $25/hour by January 1, 2031, while 'other employers' have until January 1, 2038, to reach the same rate. Both schedules begin with a $12/hour minimum on January 1, 2026.
Supporters argue
Supporters argue that this differentiated approach acknowledges the varying capacities of businesses to absorb wage increases, ensuring that larger, more profitable corporations lead the transition to a living wage. They believe it provides necessary relief and adjustment time for smaller businesses while still achieving the goal of a $25 minimum wage.
Critics contend
Critics contend that even with a slower phase-in, a $25 minimum wage would be unsustainable for many small and medium-sized businesses, leading to job cuts, reduced hours, or business closures. They argue that the definition of 'large employer' may still encompass businesses that struggle with such rapid increases, and that the overall mandate is too aggressive.
Tradeoffs
The provision attempts to balance the urgent need for higher wages for workers with concerns about the economic impact on businesses. The tradeoff is between a faster, more impactful wage increase for all and a more gradual, potentially less disruptive, approach for smaller entities.
Section 5, amending FLSA Section 6
Median Wage Standard and Automatic Indexing
This section establishes that the federal minimum wage will be permanently set at two-thirds of the national median hourly wage, as determined by the Bureau of Labor Statistics. During the phase-in period, if the scheduled minimum wage exceeds this two-thirds median threshold, it will be capped at that lower amount. After the phase-in, if the wage hasn't reached the target, it will increase annually by the lesser of $1.00 or the amount needed to reach the target. Once the target is met, the minimum wage will automatically adjust annually to maintain this ratio.
Section 6, amending FLSA Section 3(m)(2)(A)(i)
Phase-Out of Subminimum Wage for Tipped Employees
This section phases out the separate minimum cash wage for tipped employees, requiring their employers to pay them the full federal minimum wage. For large employers, the tipped cash wage increases rapidly to meet the full minimum wage within five years. For other employers, the cash wage starts at $4.75 per hour and increases annually by $1.75 (or less, if needed) until it equals the full minimum wage. The bill also explicitly states that employees have the right to retain all tips and strengthens penalties for improper tip use.
Section 7, amending FLSA Section 6(g)(1)
Phase-Out of Subminimum Wage for Youth Workers
This provision phases out the subminimum wage for newly hired employees under 20 years old. Currently set at $4.25 per hour, the bill increases this youth wage to $6.00 per hour in the first year after enactment, and then by $1.75 per hour annually (or less, if needed) until it equals the full federal minimum wage. Once the youth wage reaches the full minimum wage, the separate youth minimum wage provision is repealed.
Section 9, amending FLSA Section 14(c)(1)(A)
Phase-Out of Subminimum Wage for Workers with Disabilities
This provision phases out the subminimum wage for workers with disabilities, requiring their employers to pay them the full federal minimum wage. The wage for these workers increases from $5.00 per hour in the first year after enactment, by $1.75 per hour annually (or less, if needed), until it equals the full federal minimum wage. The bill also prohibits the issuance of new special certificates for subminimum wages and sunsets the authority to issue such certificates once the wage parity is achieved. It mandates the Secretary of Labor to provide transition assistance to employers and information to workers.
Section 10, amending FLSA Section 3
Inclusion of Incarcerated Workers under FLSA and Wage Protections
This section expands the definition of 'employee' under the Fair Labor Standards Act to include incarcerated workers, whether employed by public agencies operating correctional facilities or by private entities contracting with them. It explicitly prohibits the inclusion of the cost of board, lodging, or any court-imposed fees (such as surcharges, administrative fees, or attorney fees) in the wage paid to incarcerated workers. This ensures that incarcerated individuals performing work are paid the federal minimum wage without these deductions.
The bill defines 'large employer' as any employer with annual gross revenues of $1,000,000,000 or more, or that employs 500 or more employees nationwide. All other employers are 'other employers'.
Section 3
Why it matters:Defining terms in a dedicated section is standard legislative practice for clarity and to avoid repetition. However, a casual reader might overlook the specific thresholds that determine which wage schedule applies.
Case for: Proponents argue that clearly defining these categories ensures that the largest and most profitable corporations, which generally have greater capacity, lead the wage transition, while providing more flexibility for smaller businesses.
Case against: Critics might argue that the $1 billion revenue threshold is arbitrary or that the 500-employee threshold still includes many businesses that would struggle with the faster wage increases, potentially leading to unintended consequences for mid-sized companies.
Estimated impact: This definition directly impacts the timeline and financial burden of minimum wage increases for millions of businesses across the country, segmenting the employer landscape into two distinct regulatory categories.
After the initial phase-in period, if the minimum wage has not yet reached two-thirds of the national median hourly wage, it will continue to increase annually by the lesser of $1.00 or the amount necessary to reach the target.
Section 5(2)(B)
Why it matters:This is a technical detail designed to ensure a smooth transition to the full median wage target without excessively large jumps in any single year, which is standard for complex indexing formulas.
Case for: Proponents would argue this clause provides a safeguard, ensuring that while the minimum wage steadily progresses towards the median wage target, it does so in manageable increments, preventing sudden economic shocks.
Case against: Critics might argue that this incremental approach could prolong the period before the minimum wage truly reaches the intended two-thirds median target, potentially delaying the full benefits for workers if median wages grow slowly.
Estimated impact: This provision ensures a floor for annual increases and a ceiling on the pace of increases once the phase-in is complete but before the full indexing kicks in, affecting the predictability of future wage adjustments.
The bill explicitly states that for incarcerated workers, the cost of board, lodging, or other facilities, and any court-imposed fees (including surcharges, administrative fees, attorney fees, DNA database fees, etc.), shall not be included in the wage paid to such employee.
Section 10(m)(1) and (bb)(1)
Why it matters:This is a technical amendment to existing FLSA definitions to ensure that the newly included incarcerated workers receive the full benefit of the minimum wage, rather than having it clawed back through deductions. This is standard legislative drafting for amending existing statutes.
Case for: Proponents argue this is a vital protection against exploitation, ensuring that the minimum wage paid to incarcerated workers is truly take-home pay, preventing correctional facilities or private contractors from recouping costs through excessive deductions.
Case against: Critics might argue that prohibiting these deductions would significantly increase the financial burden on correctional facilities, as they would lose a mechanism to offset the costs of housing and legal processes for incarcerated individuals, potentially leading to fewer work opportunities.
Estimated impact: This provision could significantly increase the net earnings for incarcerated workers and impose substantial new costs on correctional facilities and their contractors by preventing common deductions from wages.