Despite questionable support, House Democrats still plan to include a $15 minimum wage provision in the budget reconciliation bill.
House Democrats are busy pulling together the giant budget reconciliation bill that will carry President Biden’s $1.9 trillion stimulus package through Congress. Part of the president’s plan is to raise the federal minimum wage to $15 per hour. However, because of opposition from key lawmakers and questions about whether a minimum wage increase can be included in a reconciliation bill, even Biden said he doesn’t think the proposal will make it into the final bill.
Nevertheless, the House Committee on Education and Labor is moving forward with legislation that would gradually increase the federal minimum wage to $15 per hour. The legislation it is working on will be combined with legislation from other House committees into the larger House reconciliation bill. If the minimum wage provision survives and the final reconciliation bill is enacted, all workers in the U.S. will be paid at least $15 per hour by 2025.
The current federal minimum wage is $7.25 per hour. However, states can have their own minimum wage, which can be higher than the federal amount, but not lower.
Under the House bill, the federal minimum wage would jump to $9.50 per hour starting a few months after the reconciliation bill is passed. The rate would then go up to $11 per hour in 2022, $12.50 per hour in 2023, $14 per hour in 2024, and $15.00 per hour in 2025. After that, it will be increased each year by the annual percentage increase, if any, in the median hourly wage of all employees.
Tipped Employees Would Get an Increase Too
Employees who work for tips would also see a pay increase under the House bill. The current federal minimum wage for tipped employees is $2.13 per hour. That would shoot up to $4.95 per hour this year if the House proposal is enacted. Then, starting in 2022, the tipped minimum wage would increase by $2 per hour each year until it equals the federal minimum wage for other workers.
Newly Hired Employees Who are Less Than 20 Years Old
Currently, employers can pay a new worker who is under 20 years of age $4.25 per hour during the first 90 days of employment. That rate would rise to $6 per hour in 2021 if the House bill is enacted. That hourly rate would then be increased by $1.75 each year thereafter until it’s the same as the standard minimum wage.
Finally, disabled workers would get a pay increase under the House bill, too. Right now, employees with a disability can be paid below the standard minimum wage at a rate based on his or her productivity. That would change under the House bill. Instead, disabled workers would have to be paid at least $5 per hour in 2021, $7.50 per hour in 2022, $10.00 per hour in 2023, $12.50 per hour in 2024, and $15.00 per hour starting in 2025. After that, they would be paid the standard federal minimum wage.