The Give America a Raise Act would rewrite key FLSA provisions to phase the federal minimum wage upward over a set multi‑year timetable, replace the current patchwork of subminimum wages for tipped workers, teens, and many workers with disabilities, and convert the federal minimum to an annually adjusted rate tied to economic indicators. It also adds administrative requirements for the Department of Labor to publish notices and provide transition assistance.
This bill matters for payroll and compliance teams, employers in service sectors that rely on tipped labor or youth hires, providers and employers who use 14(c) special certificates, and analysts modeling labor costs. It shifts wage-setting from multi‑year congressional fixes to an automatic mechanism that will affect budgeting, pricing, hiring practices, and supported‑employment programs.
At a Glance
What It Does
Amends the FLSA to (1) phase the federal minimum upward via a multi‑step schedule and then index it annually to the greater of CPI‑U or GDP growth; (2) incrementally raise and ultimately eliminate subminimum cash wages for tipped workers and the separate youth rate; and (3) phase down the 14(c) special‑certificate scheme for workers with disabilities while prohibiting new certificates and mandating Department of Labor transition assistance and notice requirements.
Who It Affects
Front‑line employers in restaurants, bars, retail, and seasonal hiring; employers and organizations operating under 14(c) special certificates; payroll and HR departments; federally regulated wage enforcement at the DOL; and low‑wage households that will see direct income changes.
Why It Matters
The bill replaces periodic congressional increases with an automatic, formulaic process that ties wages to macroeconomic indicators — a structural change in federal wage policy. It also ends longstanding federal subminimum exceptions that many stakeholders rely on for staffing and supported employment, forcing operational and programmatic adjustments.
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What This Bill Actually Does
The bill inserts a fixed multi‑year raise schedule into the FLSA's Section 6 and then converts the federal minimum into an annually adjusted rate. After the initial multi‑step increases complete, the Department of Labor’s Secretary must set the new minimum each year by applying the greater of the prior year’s CPI‑U inflation rate or annual GDP growth to the current rate.
The Secretary sets that annual amount not later than 90 days before it would take effect and the statute requires rounding up to the nearest $0.05; if neither indicator shows an increase, the wage stays the same.
Tipped workers lose the long‑standing federal tip credit over time. The bill lays out an escalating schedule of minimum cash wages for tipped employees that rises year by year until the tipped base equals the general minimum; it explicitly states that employees retain all tips, requires employers to notify employees of that right, and expands the criminal penalty language to cover tips "unlawfully kept or used." The separate subminimum for newly hired workers under 20 follows a parallel ramp up that ends when parity with the general minimum is reached, at which point the special youth wage provisions are repealed.For individuals with disabilities paid under 14(c) special certificates, the bill prescribes its own graduated wage increases over several years, prohibits issuance of any new special certificates after enactment, and requires the Department of Labor to provide technical assistance to affected employers and referrals or information for workers.
The authority to issue existing special certificates expires once the 14(c) wage reaches parity with the general minimum.Administrative mechanics are explicit: the Department of Labor must publish Federal Register and website notices 60 days before any scheduled increase, and must publish the Secretary’s annual determination 90 days before a year‑to‑year indexed increase. The bill also sets a single general effective rule — the statute takes effect on the first day of the third month after enactment unless a different timing is specified for particular phased provisions — and ties the timing of repeal provisions to the point at which subminimum schedules reach parity.
The Five Things You Need to Know
The bill sets an initial multi‑year floor then transitions to automatic annual adjustments: after the staged increases it requires the Secretary to increase the minimum annually by the greater of CPI‑U or annual GDP growth, with a 90‑day advance determination and rounding up to $0.05.
Tipped workers receive year‑by‑year cash wage increases under a defined schedule until the tipped cash rate equals the general federal minimum; employees are expressly given the right to retain all tips and employers must inform workers of that right.
The bill prohibits issuing new 14(c) special certificates, phases the special‑certificate wage upward to parity with the general minimum over a set schedule, requires DOL technical assistance during the transition, and sunsets 14(c) authority once parity is reached.
The separate subminimum for newly hired workers under 20 is increased annually by up to $2 until it equals the general minimum, at which point the youth‑wage provision is repealed; several repeal and notice provisions trigger 1 day after parity occurs.
DOL must publish a Federal Register and website notice at least 60 days before any scheduled increase, and the general effective date for the Act is the first day of the third month after enactment unless otherwise specified.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Names the bill the 'Give America a Raise Act.' This is purely stylistic but signals the bill’s focus and is the reference used in later cross‑references to the "effective date under section 7."
Staged increases and indexing of the federal minimum wage
Replaces the current statutory minimum with a multi‑step schedule that raises the floor over four successive years and then requires annual adjustments. The bill adds a new subsection that obligates the Secretary to set the subsequent yearly minimum 90 days before it takes effect, increasing the current rate by the greater of CPI‑U inflation or annual GDP growth. The new text also requires rounding up to the nearest $0.05 and includes a no‑decrease rule: if neither indicator rises, the wage stays unchanged.
Tipped employees: phased cash‑wage increases, tip rights, and penalty changes
Rewrites the tipped‑employee provisions to set a defined cash‑wage ramp for tipped workers; once the ramp reaches the level described it makes the tipped wage equal to the general minimum and removes the separate tip‑credit language. It adds a declarative employee right to retain tips, requires employers to inform employees of that right, and broadens the penalty provision in Section 16 to make it unlawful to "keep or use" tips, a change that expands enforcement exposure for employers that handle tips improperly.
Youth (under‑20) training wage: temporary ramp and repeal on parity
Amends the youth subminimum rate to start at a higher training wage for the first year and then increases it annually by up to $2 until it matches the general minimum; the bill then schedules repeal of the separate youth rate the day after parity is reached. This creates a time‑limited pathway away from a permanent lower federal rate for young, newly hired workers.
Mandatory publication of forthcoming increases
Adds a requirement that the DOL publish a Federal Register notice and post on its website at least 60 days before any statutory or indexed increase in rates under the amended sections. This is a procedural protection for employers and payroll systems to prepare for step changes and helps synchronize administrative and budget planning.
14(c) special certificates: phased integration, ban on new certificates, and transition aid
Creates a multi‑year schedule to raise wages paid under 14(c) special certificates, culminating in parity with the general federal minimum after a defined period. The bill forbids issuance of new special certificates after enactment, requires DOL to provide technical assistance to current certificate holders and referrals for workers, and terminates the legal effect of existing certificates once parity is reached — effectively sunsetting the program at that point.
General effective date
Establishes that, unless otherwise specified, the Act and its amendments take effect on the first day of the third month after enactment. Several repeal triggers and timing references in other sections are keyed to when subminimum schedules achieve parity with the general minimum.
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Explore Employment in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Low‑wage workers across sectors — the bill raises baseline cash wages and creates automatic annual adjustments, increasing earnings for adults paid at or near the federal floor.
- Tipped employees — the statutory schedule increases the guaranteed cash wage for tipped workers and affirms employees’ right to retain tips, which raises legal protections and take‑home pay during the transition.
- Young, newly hired workers — the youth training wage is higher than the current historical floor and phases up to parity, increasing pay for many entry‑level hires over the transition period.
- Workers with disabilities in the long run — while the 14(c) transition is complicated, the end state is wage parity with nondisabled peers, which advances equity in pay for individuals who remain employed in integrated settings.
Who Bears the Cost
- Restaurants, bars, and other tip‑dependent businesses — higher mandated cash wages and the practical elimination of a federal tip credit raise labor costs and may require changes to hiring, tipping policies, or menu pricing.
- Employers and organizations using 14(c) certificates (sheltered workshops) — they face rising wage obligations, restrictions on new certificates, and a sunset of the program that may force program redesigns or closure of certain placements.
- Small businesses and seasonal hire‑heavy employers — the youth wage ramp and general increases increase payroll expenses and administrative burdens for payroll systems that must track staged rates and notices.
- Department of Labor and enforcement agencies — DOL must absorb new notice, determination, technical assistance, and enforcement responsibilities without explicit appropriations in the bill, creating potential capacity strains.
Key Issues
The Core Tension
The central dilemma is classic and acute: raise wages now to improve living standards and end subminimum exceptions versus preserve employment opportunities, supported placements, and predictable operating costs for employers that serve low‑margin markets. The bill resolves the equity question by moving toward parity, but it does so at the risk of displacing jobs, altering service prices, or shrinking supported employment options unless coupled with targeted funding and workforce supports — a policy trade‑off with no mechanically clean resolution.
The bill blends an ambitious social objective with detailed administrative mechanics, and that produces several implementation challenges. Indexing the minimum to the greater of CPI‑U or GDP ties wage growth to different economic realities: CPI‑U tracks prices facing consumers, while GDP growth reflects broader economic expansion.
In periods of rapid productivity growth but muted consumer inflation, GDP indexing could push wages up faster than price signals suggest; conversely, in stagflationary periods CPI‑U might drive raises that outpace employers’ revenue growth. The statute limits administrative discretion by prescribing the formula and a 90‑day lead time, but it still forces employers and budget planners to manage a new kind of rate volatility.
Phasing out subminimums for tipped workers and people with disabilities addresses equity concerns but risks measurable trade‑offs. Eliminating or reducing the tip credit and ending new 14(c) certificates will raise operating costs for labor‑intensive service providers and for organizations that historically relied on lower wage structures to provide certain placements.
The bill attempts to soften transition effects through required DOL assistance, but it does not fund public programs that would expand competitive integrated employment services or fill potential placement gaps, leaving a practical question about where displaced or restructured opportunities will arise.
Finally, the expanded penalty language (making it unlawful to "keep or use" tips) and the explicit employee right to retain tips create a stricter enforcement standard — but enforcement depends on DOL capacity and rulemaking that the statute does not specify. There are also interactions with higher state or local minimums, tip‑pooling norms, collective bargaining agreements, and private contracts that will require legal clarifications.
Rounding rules, staggered repeal triggers tied to parity dates, and other timing mechanics increase compliance complexity for payroll systems and HR teams.
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