Raise the Wage Act aims to increase federal minimum wage for 33 million in the US

Dollar Bills

A bill to amend the Fair Labor Standards Act 1938 (FLSA), to increase the federal minimum wage to $15 (£12.03) an hour by 2025, has been passed by the US House of Representatives.

The bill, colloquially known as the Raise the Wage Act 2019, was received by the US Senate on 18 July 2019 after being passed by the House of Representatives that day.

The Raise the Wage Act 2019 outlines a schedule to gradually improve the federal minimum wage from $7.25 (£5.82) an hour to $15 an hour by 2025; future increases to the minimum wage beyond this date will align with median wage growth to ensure that the value of the federal minimum wage does not erode over time.

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The schedule includes an increase to $8.40 (£6.40) in 2019, $9.50 (£7.62) in 2020, $10.60 (£8.50) in 2021, $11.70 (£9.39) in 2022, $12.80 (£10.27) in 2023 and $13.90 (£11.15) in 2024, ultimately reaching $15 an hour in 2025.

The bill further ensures that tipped employees are paid at least the full federal minimum wage, by phasing out the sub-minimum wage for this group; by 2026, these employees will receive a minimum of $14.10 (£11.31), and by 2027, pay will be indexed to median wages.

In addition, employees under the age of 20 will be paid at least the full federal minimum wage under the bill proposals, because the sub-minimum wage for youth workers will be phased out, while sub-minimum wage certificates for employees with disabilities will be ended, in order to provide better opportunities for these individuals.

Analysis by the Economic Policy Institute, published on 17 July 2019, stated that 33 million employees will benefit from the federal minimum wage increases; once fully implemented, this translates into an annual increase of around $2,760 (£2,214.07) for the average year-round employee in the US.