Fair Wage Act of 2025

This bill, known as the Fair Wage Act of 2025, significantly amends the Fair Labor Standards Act of 1938 by establishing a new federal minimum wage system. Instead of a single national rate, it mandates a **regional minimum wage** that varies based on the cost of living in specific metropolitan statistical areas or nonmetropolitan portions. This aims to better reflect economic realities across different parts of the country. The regional minimum wage is calculated by taking a percentage of the national average hourly wage for private sector, non-supervisory workers, starting at 40% and increasing to 50% over two years. This base is then adjusted by a **regional price parity (RPP)** factor, which can range from 87.5% to 115% depending on the area's RPP. After five years, the wage will be periodically updated to ensure it does not decrease. Furthermore, the bill revises the minimum wage for **tipped employees**, setting it at 30% of the new regional minimum wage. It also adjusts the subminimum wage for **newly hired employees aged 18 or younger** to two-thirds of the regional minimum wage, narrowing the age bracket for this provision.