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Since the second Trump administration swept into office in January 2025, it has undertaken a range of damaging and destabilizing actions that have weakened the economy, undermined workers, hurt businesses and consumers, and threatened core elements of our democracy. While Trump has targeted numerous Democratic-led states and cities, the Washington, D.C., region has faced acute and prolonged harms since day one. From the first set of executive actions signed on Inauguration Day, the Trump administration has attacked people and businesses in the capital region repeatedly and intensely. These initial actions announced the president’s dubious claims of authority to fire large segments of the federal workforce, eliminate long-standing federal agencies and programs, and begin a campaign of illegal and inhumane mass deportations.  

The Trump administration’s damaging actions have been enabled and abetted by Republican members of Congress. Their passage of H.R. 1, the bill that the White House has referred to as the “One Big Beautiful Bill Act” (OBBBA), amplifies the administration’s mass deportation agenda and shreds critical health care and food supports for lower-income families to finance tax cuts for the wealthy. This funding bill will only cause more pain in the years ahead for Washington, D.C.-area households and throughout the country.

Congress also passed a federal spending bill that constrained the District of Columbia’s ability to spend its own tax revenue (Koma 2025) and a resolution that may force the district to adopt local tax code changes that match the OBBBA, whether the city wants to or not—changes that will jeopardize hundreds of millions of dollars for city programs (D.C. Fiscal Policy Institute 2026).

In this report, we assess the early indicators of the damage of Trump’s actions and their effects on the Washington, D.C., regional economy, with particular attention to effects on workers and the labor market. We focus on this region due to its prominence as an early target of the Trump administration, in part due to its large federal workforce. Additionally, the district’s unique status as a non-state means that its leaders have far less legal authority to resist Trump’s interference than other target areas do.

Throughout this report, unless otherwise indicated, the data describe economic conditions for the Washington, D.C., metropolitan statistical area (MSA), which includes the District of Columbia, four nearby counties in Maryland, six cities and 11 counties in northern Virginia, and one county in West Virginia. We also refer to this region as the DMV (Washington, D.C.; Maryland; and Virginia). While we do not yet have the requisite data to fully and precisely document all the effects of the administration’s actions, we can see clear signals that the regional economy is already struggling, with more severe impacts likely to register in the data soon.

We then explore some of the factors that make other regions particularly vulnerable to significant economic harm from the Trump administration’s agenda. These include counties with large concentrations of federal workers, areas where federal transfer income (such as Medicaid and Social Security) makes up a significant portion of the region’s economic base, and places with significant immigrant populations. Though Trump has largely targeted prominent, Democratic-led areas, many of the regions most susceptible to the harmful economic consequences of the administration’s actions are rural counties, frequently represented in Congress by Republicans.

Trump’s actions in Washington, D.C., have led to reduced employment and rising unemployment

The clearest sign of the harm that the Trump administration’s actions have done to the Washington, D.C., regional economy is the substantial drop in the region’s employment rate. Based on EPI analysis of Current Population Survey data from the Bureau of Labor Statistics, from December 2024 to December 2025, the share of the regional working-age population with a job fell by 3.2 percentage points.1 As shown in Table 1, this compares with a decline of just 0.4 percentage points for the country over the same period. Among prime-age workers (those ages 25–54), the share employed in the DMV fell by 2.7 percentage points, compared with a decline of just 0.1 percentage points for the country overall.

This dramatic drop in regional employment is a direct result of the Trump administration’s relentless attacks on federal government workers, cuts to federal programs and agencies, and their cascading effects on connected regional industries. Prior to Trump’s taking office, federal employees made up 11.2% of the metro area’s total workforce (BLS-CES-SAE 2025).2 Between the end of 2024 and 2025, federal employment in the DMV region fell by more than 53,800 jobs (-14.2%) (BLS-CES-SAE 2026).3 These losses reverberated through the regional economy as affected households pulled back on spending, and many may have even opted to move, as data show the DMV region had the largest increase in home sale listings of any major metro last year (Brookings Institution 2026).

These significant cuts to federal employment, though highly damaging on their own, are only the first layer of the administration’s harm on the regional labor market. The DMV has a non-federal workforce of over three million people (BLS-CES-SAE 2026), many of whom work at firms that consult with, contract with, are funded by, or are otherwise connected to the government.4 The Trump administration has terminated thousands of grants to scientific research institutions (Kozlov, Tollefson, and Garisto 2026) and frozen or delayed funding for tens of thousands of nonprofit organizations, causing those targeted to limit operations or lay off staff (Tomasko et al. 2025). These cuts have also shrunk the funding pool for nonprofit groups, causing budget challenges even for those not previously receiving federal funding, as they must compete with groups previously funded through federal programs that are now scrambling to fill gaps with private support (Barrett 2025). The administration has also moved to cancel contracts with any company that maintains a commitment to DEI standards (Singh 2026). Although these cuts affect organizations everywhere, the DMV is disproportionately vulnerable to the economic harms of attacks on this sector as it has one of the highest concentrations of nonprofits in the country (Friesenhahn 2025). This is evident in the region’s slight dip (-0.3%) in private-sector employment from December 2024 to December 2025, a change from the consistent, albeit slowing, growth that had marked the years following the COVID-19 pandemic. At the national level, private-sector employment experienced slow but still positive change (0.5%) over the same period (BLS-CES-SAE 2026).5

The widespread impact of the administration’s actions can be seen in the breadth of employment declines across racial, ethnic, gender, and age groups in the region. As shown in Table 1, the employment rate fell by at least 2 percentage points for every demographic category of workers in the DMV. Notably, young workers under age 25 (-4.3 percentage points), workers age 55 and older (-3.3 percentage points), men (-3.5 percentage points), and Black workers (-5.9 percentage points) all experienced drops in their employment rates larger than the regional average. For older workers, the above-average decline likely reflects, at least in part, the firings and retirements of many federal employees, including many who had been near retirement age and opted into the so-called “Fork in the Road” deferred resignation program. For young workers, the administration’s funding and programmatic cuts directly reduced many traditional Beltway early-career opportunities (internships, fellowships), while weakness in the broader regional economy simultaneously forced area employers to pull back on entry-level positions.

Still, not all groups have been equally affected by Trump’s actions. As Table 1 shows, Black workers in the DMV region have suffered the largest employment declines, with the share employed falling by 5.9 percentage points in 2025. This is nearly triple the employment drop experienced by white workers (2.0 percentage points) in the region and, notably, more than seven times the employment drop of Black workers throughout the country overall (0.8 percentage points). Again, this is a direct consequence of the administration’s attacks on the federal workforce. Black workers have long tended to make up a larger share of the public sector than they do in the private sector—both in the DMV and across the country. This is because the public sector has historically been a pathway to the middle class for workers of color who face labor market discrimination in the private sector (Maye and Marvin 2025).

Trump’s massive cuts to federal employment have also rapidly undone what had been considerable progress in shrinking the regional Black-white employment gap. Figure A shows the employment rate of DMV workers, overall and by race/ethnicity, since the end of 2018. The rapid drop in the Black employment rate since the start of President Trump’s second term is striking, bringing the regional Black employment rate back down to its pandemic-era low. It is also notable that before that drop began, Black workers in the region were employed at essentially the same rate as their white counterparts—the only time in the last two decades when that occurred. These losses in employment will exacerbate existing racial and gender inequity across wages, poverty, and unemployment (Markoff and Zielinski 2026; Zielinski 2025; Busette and Elizondo 2022).

Recent increases in the DMV’s overall unemployment rate underscore the damage Trump is doing to the region. The non-seasonally adjusted unemployment rate jumped more than a full percentage point, from 3.1% in January 2025 to 4.4% in January 2026—more than four times the increase in the national figure. (Importantly, this increase understates the weakening of the area labor market, as the BLS estimates the DMV labor force shrank by 3% over the same period—meaning that many workers who would have been counted as unemployed simply left the area labor force.) For comparison, the national non-seasonally adjusted unemployment rate increased by less than half a percentage point, moving from 4.4% in January 2025 to 4.7% in January 2026 (BLS-LAUS 2026).

These numbers do not capture the full extent of the economic downturn in the DMV area, nor can they give us precise insight into where the pain has been most acutely felt. The administration’s violent deportation agenda, for example, will lead to a drop in immigrant and U.S.-born Hispanic workers’ employment, but resulting changes in Hispanic employment rates may be muted by the corresponding shrinking of the overall Hispanic population (Zipperer 2025). In other words, while the overall Hispanic population in the U.S. may fall dramatically in coming years, the ratio of remaining employed workers to remaining total population may stay somewhat consistent. This will mask the true scale of the economic and social harm being done to immigrant communities in the DMV and across the country.

It is also difficult to fully quantify how the deployment and continued presence of National Guard troops, violent immigration actions, and other authoritarian, fear-inducing tactics have impacted D.C.-area businesses, workers, and families, particularly in neighborhoods with predominately Black and Latino populations. Early data show regional declines in tourism, consumer spending, and foot traffic; harder to capture are the emotional and long-term economic consequences (Montgomery 2025; Hadden Loh and Haskins 2025; Sachs and Cocco 2025). Other recent analyses estimate similar economic harms in cities where targeted federal immigration enforcement actions have been aggressively deployed (Rosenthal and Sojourner 2026). A full accounting of the Trump administration’s harms on the Washington, D.C., region will take years to document.

Other localities should brace for similar consequences

Some of the Trump administration’s actions and their acute consequences are unique to the DMV, a function of the region’s high concentration of federal employees and government contractors, as well as the District of Columbia’s lack of statehood and full constitutional rights. However, the anti-government attacks the administration has unleashed on DMV-area households, workers, and businesses will have cascading consequences for communities throughout the country. The effects of the administration’s authoritarian attacks on the civil service, democratic institutions, and immigrants (Human Rights Watch 2026) that first registered across the DMV should be viewed as a preview of the consequences that will be felt in other regions. While no locality will be spared, regions particularly at risk include those with large shares of government workers (especially federal workers, but state and local government workers too), localities in which federal funding and social safety net programs make up a large portion of total area income, and those with large immigrant populations.

Trump’s attacks on the federal workforce will harm communities that rely on their employment

The day Trump returned to power in January 2025, he began attacking the federal workforce, first by moving to reclassify tens of thousands of federal employees to make it easier to fire and replace them with political loyalists (EPI 2026c), and then by stripping more than one million federal workers of their collective bargaining rights (EPI 2025a). The Trump White House subsequently worked feverishly to slash federal employment, attempting large and chaotic reductions in force, shuttering entire agencies, and coercing tens of thousands of staff to resign, among many other attacks (Poydock 2025). As of March 2026, the administration’s actions have reduced nationwide federal government employment by over 350,000 (11.7%) since January 2025 (Gould 2026).

Though federal workers make up a sizeable share of the DMV’s workforce, over 80% of federal workers live outside the region (Partnership for Public Service 2024). For instance, in Alaska, Hawaii, and New Mexico—states that are home to large swaths of federal and Native land, military bases, and federal research institutions—federal workers make up at least 4.5% of total employment (EPI 2025c). Within states, federal workers tend to be concentrated in specific localities. For instance, in Apache County, Arizona, which is largely made up of the Navajo Nation and the White Mountain Apache Reservations, lands that extend beyond county lines, the federal government employs 12% of the county’s workers, more than double the next most significant county for federal worker employment in the state (EPI 2025c). There are 22 U.S. counties, spread across the South, Midwest, and West Census regions, where federal workers comprise at least 10% of the county’s workforce (see Table 2).

In these counties and elsewhere, federal workers are the backbone of the regional economy, both through the essential services they provide and through their contributions to the local economy. Trump’s attacks simultaneously threaten federal workers’ livelihoods and the economic health of communities in which these workers’ spending on goods and services makes up a large share of economic activity in the region. In Apache County, Arizona, civilian government workers’ earnings comprise 11.7% of total economic activity in the county (see Table 3)—roughly the same as their share of overall county employment. However, in some counties, federal employees’ earnings are a disproportionate share of the regional economic base. For instance, in Leavenworth County, Kansas, where federal employees make up 10.0% of employment (Leavenworth has a large federal prison), federal civilian earnings comprise 22.1% of total income in the county.

The effects from lost federal jobs and income in these regions could be devastating. Some of these communities are places that have already faced historic disinvestment and in which there are few local employment opportunities that can match the quality of federal government jobs. These jobs are historically stable, good quality, union jobs that offer a pathway to the middle class, particularly for workers without a college education.6

Regions highly dependent on federal revenue will also suffer from a reduction in services and a loss of income

Beyond the harm to localities from reductions in the federal workforce, localities that are particularly reliant on federal government revenue and services will bear the consequences of Trump’s actions most acutely, though no locality will be spared from harm. For example, the Trump administration has announced or considered $23 billion in cuts to federal clean energy projects in nearly every state (CATF 2025) and $8 billion in cuts to colleges and universities that will impact every state’s economy (Bedekovics and Ragland 2025). Trump’s 2025 budget bill also made massive cuts to federal safety net programs that millions of low-income households rely on in order to finance tax cuts for the wealthiest households and corporations.

Funds from federal programs such as SNAP, Medicaid, and other social programs not only help struggling families make ends meet, they also comprise a significant share of a locality’s “economic base,” the amount of money circulating in that region, as shown by sociologist Robert Manduca in a recent working paper (2025). Indeed, an often-overlooked benefit of Medicaid coverage is its role as a source of income for low-income households (money they would have had to spend on medical care in the absence of Medicaid). For the bottom 20% of households in the U.S., Medicaid comprised 70% of their total money income, based on recent data from the Congressional Budget Office (Bivens, Wething, and Morrissey 2025). In fact, government transfers such as Social Security, Medicare, and Medicaid collectively made up 40% of the economic base of U.S. regions in 2022 (Manduca 2025). Substantial cuts to government social programs that support low-income households could reduce the economic base of these localities, at a scale equivalent, in many cases, to the loss of entire private industries in those areas.

Without deliberate intervention by state lawmakers to offset lost federal revenues, localities in every state face dire economic losses, but states particularly reliant on government transfers will suffer most. For instance, take Clay County, West Virginia, which is represented in Congress by Rep. Carol Miller (R-WV01), who voted in support of Trump’s budget bill (Miller 2025). Clay County’s poverty rate is more than double the national rate, and its per capita income is half the national amount (U.S. Census 2024a). Of the 10 U.S. counties that rely most on each of the largest federal social insurance programs (Medicare, Medicaid, SNAP, and Social Security) as a share of their economic base, Clay is the only county in the country to show up three times (see Table 4). Federal government transfers in the form of Medicare, SNAP, and Social Security payments comprise 57% of Clay County’s economic base, 20 times the share comprised by the earnings of every private industry in the county combined. Alaska, Arizona, Florida, Georgia, Kentucky, Tennessee, and West Virginia all have at least three counties that are ranked in the top 10 in the country for their reliance on a given social safety net program as a share of the county’s economic base (see Table 4).

Localities that have significant shares of federal workers and rely heavily on federal government transfers may face particularly significant consequences as a result of Trump’s attacks on the federal workforce and the Republican budget bill’s cuts to essential social safety net programs. For example, in Rio Arriba County, New Mexico, and Apache County, Arizona, federal government workers make up 16.1% and 12.0% of all workers in the county, respectively (EPI 2025b). At the same time, both counties are ranked in the top-10 counties most reliant on federal government transfers—Apache is #2 for Medicaid, and Rio Arriba is #10 for SNAP. In Apache County, federal government transfers account for three-quarters (76.9%) of the county’s economic base, and the earnings of federal government civilian workers account for 11.7%—the Navajo Nation Tribal Government is the county’s largest employer (NACOG 2023). Meanwhile, private earnings account for a mere 2.8% of the county’s economy. In Apache, Trump’s cuts to both the federal workforce and federal government programs mean that the federal government may be unable to fulfill its legal obligations to tribal communities (Brown 2025) that have faced decades of disinvestment and depressed economic outcomes resulting from historic land theft and forced assimilation. Apache County’s poverty rate of 31.2% (AZ Economics 2026) is nearly triple the national rate of 11.1% in 2023 (Shrider 2024).

Trump’s anti-immigrant crackdown and deportation agenda hurt localities with large immigrant populations

Trump has launched a campaign of terror against immigrant communities, communities of color, and those who stand with them. Last summer, Trump federalized local police and deployed thousands of federal troops to diverse cities with large immigrant populations (Kim 2025). Though Washington, D.C., may have experienced the most visible federal troop presence, a function of the district’s lack of statehood and the president’s unchecked authority to mobilize the National Guard there (Dallas 2025), Los Angeles was the first city Trump targeted after public opposition to aggressive immigration raids (Kim 2025). It was soon followed by Washington, D.C.; Memphis, Tennessee; Portland, Oregon; New Orleans, Louisiana; Minneapolis, Minnesota; and Portland, Maine.

These attacks are characteristic of an authoritarian playbook that includes forcing the leaders of diverse, opposition-led communities to bend to the strongman government’s will (McManus, Benson, and Herman 2024). Minneapolis, home to a large immigrant population, was subjected to an unprecedented immigration crackdown that drew widespread protests (Boone 2026). During “Operation Metro Surge,” as it was called, federal immigration enforcement officials made 4,000 arrests and killed two U.S. citizens. Though the true toll of this violent operation may never be fully quantified, initial economic data show clear cause for concern. A recent analysis estimated that Trump’s immigration crackdown has led to a 2.9% decline in consumer spending in Minnesota over a single month—the equivalent of the state’s economy losing $626 million (Rosenthal and Sojourner 2026). Relative to overall consumer spending, the food and accommodation sector (which employs a large share of immigrant workers) saw the most significant decline in January 2026—3.8% or a $46 million reduction in economic activity. Researchers also estimated that nearly 3% of workers in the Minneapolis-Saint Paul region were unable to work during the occupation, resulting in a loss of over $100 million in wages (Sojourner and Rosenthal 2026).

Trump’s deportation agenda will continue to destabilize local communities and result in job losses for immigrant and U.S.-born residents alike (Zipperer 2025). Though immigrants live in counties across the U.S., coastal urban areas tend to have the largest shares of foreign-born residents. Counties with the largest foreign-born populations include Miami-Dade, Florida; Queens, New York; Aleutians, Alaska; and Hudson, New Jersey (see Table 5). Counties with relatively large shares of immigrants may see particularly acute harms from aggressive immigration enforcement.

Communities face overlapping economic threats from attacks on federal workers, the social safety net, and immigrants, but state and local lawmakers can resist them.

The Trump administration’s attacks on the federal workforce, the social safety net, and immigrant communities are designed to exacerbate economic precarity in many communities that are already struggling (Bivens 2026). The implementation of Trump’s authoritarian agenda in the DMV region may be the first, clearest, and in some cases most direct manifestation of its harms, but other localities across the country—particularly those with large federal workforces, those that are heavily dependent on federal revenue and those with sizeable immigrant populations—are far from immune, and many will suffer as much, if not more, from this agenda.

While state and local leaders cannot stop federal attacks, they do have the power to resist Trump’s agenda by improving state labor standards (EPI 2026b), advancing protections for immigrant workers (Díaz and Whitaker 2026), investing in the public-sector workforce (Bivens and Shierholz 2026), and using progressive tax policies (Austin and Davis 2025) to stabilize funding for critical social programs and other investments that workers, families, and communities need.

Notes

1. Throughout this report, unless explicitly noted, the source for all employment rate data is the authors’ analysis of Current Population Survey data (EPI 2026a). We compare an average of calendar year 2025 with calendar year 2024 in order to have adequate sample sizes for the noted demographic groups.

2. Employment level by industry and sector data come from the authors’ analysis of the Bureau of Labor Statistics’ Current Employment Statistics (CES) State and Metro Area (SAE) data.

3. These numbers are calculated using monthly totals rather than annual averages. A quarterly comparison of 2025Q4 to 2024Q4 finds roughly the same results—employment fell by 52,600 jobs (13.9%). The quarterly analysis omits October in both years to maintain an apples-to-apples comparison, accounting for missing data due to the government shutdown that began in October 2025 and the subsequent lapse in Bureau of Labor Statistics funding.

4. The non-federal workforce includes private sector workers as well as state and local government employees.

5. These numbers are calculated using monthly totals rather than annual averages. Quarterly comparisons of 2025 Q4 to 2024 Q4 produce similar results—private sector employment fell by 0.1% in the DMV and grew by 0.7% nationally. The quarterly analysis follows the methodology outlined in note 2.

6. On average, federal workers with advanced degrees typically earn less in wages and total compensation than their private-sector counterparts. Federal workers without an advanced degree typically earn more than their private-sector counterparts and have access to retirement benefits that have become less common in the private sector (CBO 2024).

References

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AZ Economics. 2026 “Apache County, Arizona.” U.S. Economic Research. Accessed April 2026.

Barrett, William P. 2025. “America’s Top 100 Charities: A Year of Pain After Trump Cuts.” Forbes, December 12, 2025.

Bedekovics, Gréta, and Will Ragland. 2025. Mapping Federal Funding Cuts to U.S. Colleges and Universities. Center for American Progress, July 2025.

Bivens, Josh. 2026. The Trump Administration’s Macroeconomic Agenda Harms Affordability and Raises Inequality. Economic Policy Institute, February 2026.

Bivens, Josh, and Heidi Shierholz. 2026. “You Can’t Starve the Public Sector to Excellence.” Working Economics Blog (Economic Policy Institute), February 27, 2026.

Bivens, Josh, Hilary Wething, and Monique Morrissey. 2025. Cutting Medicaid to Pay for Low Taxes on the Rich Is a Terrible Trade for American Families. Economic Policy Institute, February 2025.

Boone, Rebecca. 2026. “A Timeline of Trump’s Immigration Crackdown in Minnesota.” PBS Newshour, February 13, 2026.

Brookings Institution. 2026. “Active Residential For-Sale Listings,” DMV Monitor. Last updated February 18, 2026.

Brown, Alex. 2025. “For Indian Country, Federal Cuts Decimate Core Tribal Programs.” Stateline, March 4, 2025.

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Busette, Camille, and Samantha Elizondo. 2022. “Economic Disparities in the Washington, D.C. Metro Region Provide Opportunities for Policy Action.” Commentary, Brookings Institution, April 27, 2022.

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D.C. Fiscal Policy Institute. 2026. “Congressional Interference Will Cost D.C. Nearly $700 Million in Local Revenue and Jeopardize Efforts to Reduce Child Poverty.” D.C. Fiscal Policy Institute, February 4, 2026.

Díaz, Marisa, and Mimi Whitaker. 2026. How States and Localities Can Strengthen Workplace Protections for Immigrant Workers. National Employment Law Project, January 2026.

Economic Policy Institute (EPI). 2025a. “Executive Order on ‘Exclusions from Federal Labor-Management Relations Programs.’” Federal Policy Watch (Economic Policy Institute), December 17, 2025.

Economic Policy Institute (EPI). 2025b. How Many Federal Employees Live in Your State? Economic Policy Institute.

Economic Policy Institute (EPI). 2025c. “New Resource Calculates How Many Federal Workers Live in Every State, County, and Congressional District” Economic Policy Institute (press release). March 3, 2025.

Economic Policy Institute (EPI). 2026a. Current Population Survey Extracts, Version 2026.3.11, https://microdata.epi.org.

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Manduca, Robert. 2025. Financial and Transfer Income as Components of the Regional Economic Base. Washington Center for Equitable Growth, June 2025.

Markoff, Shira, and Connor Zielinski. 2026. Chronic Racial Inequality Holds Back Workers and Equitable Economic Growth. D.C. Fiscal Policy Institute, March 2026.

Maye, Adewale A., and Stevie Marvin. 2025. “Trump Attacks on Federal Agencies Have Steep Implications for Black Workers.” Working Economics Blog (Economic Policy Institute), April 10, 2025.

McManus, Allison, Robert Benson, and Dan Herman. 2024 “The Dangers of Project 2025: Global Lessons in Authoritarianism.” Center for American Progress, October 2024.

Miller, Carol. 2025. “Miller Votes to Send the One, Big, Beautiful Bill to President Trump’s Desk” (press release). Office of Congresswoman Carol Miller, West Virginia’s First District, July 3, 2025.

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Poydock, Margaret. 2025. “How Trump Has Dismantled the Federal Workforce in His First 100 Days.” Working Economics Blog (Economic Policy Institute), May 23, 2025.

Rosenthal, Aaron, and Aaron Sojourner. 2026. The Economic Impact of Operation Metro Surge in January 2026: A Synthetic Difference-in-Differences Analysis. North Star Policy Action, February 2026.

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Sojourner, Aaron, and Aaron Rosenthal. 2026. Impact of DHS Agent Surge on Minneapolis-Saint Paul Metro Area Labor Outcomes. North Star Policy Action, February 2026.

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Zielinski, Connor. 2025. “Inequality Remained Extreme in 2024 as D.C. Backslid on Poverty.” DCFPI Blog (D.C. Fiscal Policy Institute), September 15, 2025.

Zipperer, Ben. 2025. Trump’s Deportation Agenda Will Destroy Millions of Jobs: Both Immigrants and U.S.-Born Workers Would Suffer Lob losses, Particularly in Construction and Child Care. Economic Policy Institute, July 2025.

Access to paid sick leave is increasing in some areas

On a national level, we’ve seen positive trends in access to paid sick days from 63% of private-sector workers in 2012 to a record high of 80% in 2025, according to the latest data from the Bureau of Labor Statistics. These advances are driven by the fact that state and local governments enacted laws to enable workers to earn paid sick leave. In 2024, ballot measures were passed in Alaska and Nebraska. Alaska’s leave policy took effect on July 1, while Nebraska’s took effect just last week (albeit weaker than originally passed). Unfortunately, a paid sick leave measure that Missouri voters overwhelmingly approved by ballot was rolled back by the legislature and is no longer in effect.

Currently 18 states (including Washington, D.C.), 17 cities, and 4 counties have some form of paid sick leave requirements. Given that the existence of state laws varies, it’s no surprise that there are significant differences in access to paid sick time across the country, as shown in Figure A. The share of workers with access to paid sick days ranges from only 63% in the East South Central states (Alabama, Mississippi, Kentucky, and Tennessee) and 71% in the West South Central (Arkansas, Louisiana, Oklahoma, and Texas) up to 98% in the Pacific states (California, Oregon, Washington, Hawaii, and Alaska). The fact that the nearly 30 million workers in the Pacific states have essentially universal access to at least some form of paid sick days highlights that this key labor standard is purely a policy choice—and one that state and local governments can enforce on their own.

Figure A

Notably, many state governments in the East South Central and West South Central Census divisions have passed preemption laws prohibiting local municipalities from passing paid sick leave policies. So not only have legislative majorities failed to enact paid sick leave at the state level, but these states have also blocked cities and counties from passing legislation to provide paid sick leave for their workers.

Access to paid sick leave is greatest for the most highly paid workers

As with geographic variation, access to paid sick leave remains vastly unequal by wage level. As shown in Figure B, the higher the wage, the greater the access to paid sick leave. Among the 10% of private-sector workers with the highest wages, 96% have access to paid sick days. By contrast, among the 10% of workers with the lowest wages, only 41% have access to paid sick days.

Figure B

The unequal access to paid sick days is particularly troubling since low-wage workers are least able to absorb lost wages when they or their family members are sick. Workers may have trouble paying for housing, food, health care, and other necessities (see Table 1 of this report). This unequal access is why state laws are so important: Most of the gains from state and local paid sick provision benefited the lowest-wage workers. Access for the bottom 10% of wage earners increased from 19% in 2012 to 41% in 2025.

There is also huge variation in access to paid sick days within the private sector for workers by work hours and union status. Full-time workers are much more likely to have paid sick days than part-time workers (88% versus 56%). Unionized workers have greater access to paid sick days than nonunion workers (86% versus 80%).

Fortunately, there is a relatively simple way to address some of these inequities: The federal government can pass legislation to mandate paid sick leave for all workers. In the absence of federal action, state governments can move on their own and mandate that employers provide this key labor standard. Paid sick leave not only helps reduce the transmission of disease, it also provides economic security for workers who might otherwise lose income if they have to take time off from work. 

The federal Occupational Safety and Health (OSH) Act—passed in 1970 after decades of fierce advocacy by organized labor and its allies—mandates that workplaces be “free from recognized hazards that could cause death or serious physical harm to employees.” To implement this mandate, the Act created the Occupational Safety and Health Administration (OSHA) to develop and enforce workplace health and safety standards. OSHA standards are designed to limit workers’ exposure to hazards; ensure access to adequate safety equipment; and require that employers monitor workplaces for hazards and report injuries and illnesses. OSHA also provides training and compliance assistance to workers and employers and gives workers the right to request workplace inspections. The OSH Act established the National Institute for Occupational Safety and Health (NIOSH), the sole agency responsible for conducting research to inform OSHA policymaking with evidence-based assessments of injury and fatality risks, and providing actionable guidance for employers to improve safety. Since OSHA was created, fatalities and work-related injuries have dropped by 65%, even while the U.S. workforce has doubled in size.

Separately, following a century of lawmaking related to mine safety, the 1977 Federal Mine Safety and Health Act created the Mine Safety and Health Administration (MSHA), which is charged with enforcing mine safety rules with the goal of reducing deaths, injuries, and illnesses in U.S. mines.

The OSH Act establishes roles for both federal OSHA and states on occupational safety and health protection. The relationship between federal government and state OSH mandates is complicated. The OSH Act grants the federal government jurisdiction over worker health and safety law, but states have the option to establish their own state-level OSHA standards and enforcement systems (known as “state plans”) that are then monitored by federal OSHA. State OSHA plans must be approved by federal OSHA, be “at least as effective” as federal OSHA, and must cover state and local government employees at a minimum. Currently, federal OSHA can only cover private-sector workers. The cost of running a state plan is shared between the state and federal government. At present:

• 29 states are under federal OSHA jurisdiction (“federal OSHA” states). Federal OSHA covers all private businesses engaged in commerce and all federal agencies but does not cover state and local governments (see Figure A). Self-employed workers are excluded and employers with 10 or fewer employees are exempt from OSHA’s record-keeping requirements (though they are still required to comply with OSHA standards and to report serious injuries and fatalities).
• 21 states have OSHA-approved state plans that cover both private-sector and state and local government workers.{{1}}
• Six states have “hybrid” plans, where private-sector workers fall under federal OSHA jurisdiction, but public-sector employees are covered by a state plan.{{2}}

Figure A

What are the threats to federal workplace health and safety protections?

Threats to federal workplace health and safety protections include:

• Diminishing capacity to enforce or develop workplace safety standards: OSHA has long been understaffed and underfunded. Federal and state OSHAs collectively employ fewer than 2,000 inspectors to cover 161 million workers; it would take the agency 185 years to inspect every U.S. workplace just once. Trump administration actions have already significantly exacerbated OSHA’s existing capacity and enforcement constraints, by:
  • Attempting to close OSHA and MSHA offices, as well as attempting to eliminate NIOSH;
  • Issuing guidance allowing OSHA staff to reduce certain employer OSHA violation penalties by up to 70%; and
  • Announcing self-audit programs that carve out inspection exemptions for employers. These programs reduce the agency’s enforcement powers and create a system that relies on self-policing and individual companies’ voluntary adherence to the law.
• Restricting the General Duty clause: Trump’s Department of Labor has proposed carving out exemptions to this foundational OSHA protection, which ensures that employers have a basic obligation to protect workers from known and preventable dangers not covered by other OSHA regulations. This rule change would exempt certain industries from this obligation and has dangerous implications for the future of OSHA.
• Blocking or delaying long-overdue standards on serious hazards like silica dust or heat exposure: The Trump administration has already paused enforcement of a new mine safety rule on silica exposure that would prevent black lung disease and death from silicosis among coal miners. It is widely anticipated that the administration will block or weaken a proposed new OSHA standard to protect workers from extreme heat exposure.

How can states maintain and strengthen workplace health and safety protections?

State authority to enact and enforce health and safety standards depends on whether a state is a “federal OSHA” or “state plan” state, as follows:

• Federal OSHA states are preempted from enacting standards in areas already addressed by federal OSHA but can still enact policies covering areas of occupational health and safety not addressed by federal law.
• States with state OSHA plans have authority to enact standards that exceed the federal floor—for example, by strengthening existing standards or adopting standards in additional areas, as well as strengthening enforcement programs and imposing civil monetary penalties that exceed federal amounts.

Step I: Update state laws and standards to lock in current federal protections

In state plan states, OSHA standards and enforcement must be at least as strong as the floor set by federal OSHA. However, many state plan states have not achieved this basic standard. Meanwhile, federal OSHA states run the risk of leaving workers unprotected if federal OSHA standards are eliminated or enforcement is further weakened.

Federal OSHA states should:

1. • Ensure OSHA coverage for all public employees: Federal OSHA excludes millions of workers from its protections because it does not cover state and local government employees. Six federal OSHA states have passed protections covering all public employees, but 23 federal OSHA states and the District of Columbia have not yet taken necessary steps to extend protections to state and local government employees. All federal OSHA states should extend coverage to public-sector workers, as is currently under consideration in Pennsylvania. (Because state OSHA plans often struggle with underfunding and capacity constraints that limit their effectiveness, advocates should remain aware that extending coverage to public employees under this model is an important short-term solution, while a best-case long-term scenario would be an expanded federal OSHA that covers all private- and public-sector workers).
   • Pass worker health and safety trigger laws: Federal OSHA states cannot strengthen or adopt standards in areas already regulated by federal OSHA. However, states can safeguard against the possibility of existing federal standards being eliminated by passing legislation to automatically incorporate into state code any eliminated federal standards to ensure workers are not left unprotected. For example, a recently enacted Illinois law directs state agencies to ensure state wage and hour, occupational health and safety, and mine safety standards remain at least as protective as existing federal standards in the event that certain federal protective standards are eliminated.

State plan states should:

• • Ensure full adoption of all current federal standards: Too many state plan states have track records of failing to adopt required new federal standards in their OSHA plans. For example, during the COVID-19 pandemic, the state of Arizona failed to adopt an emergency temporary standard (ETS) for health care workers and failed to align with federal OSHA’s new increase in penalties. After federal OSHA threatened to revoke Arizona’s state plan privilege, the state met its obligations to adopt these standards and penalty increases. Some states, like Kentucky, have failed to update their penalty policy to align with federal minimum standards.

Step II: Close critical gaps in workplace health and safety protections

• All states should adopt standards in key areas federal OSHA fails to cover: Federal OSHA lacks standards in several areas where workers face serious and ongoing workplace hazards, but intense industry opposition has blocked or stalled federal OSHA rulemaking. Fortunately, all states have latitude to adopt their own standards in these areas and can do so by drawing on existing, evidence-based proposals already developed (but not enacted) by federal OSHA, relying on recommendations from NIOSH, or replicating strong standards already implemented in other states.
  • Heat exposure: Heat is a serious and deadly hazard for many workers. There is currently no federal heat standard; it is unlikely that the proposed protection moving through the rulemaking process will be finalized. In the absence of a federal standard, several states have implemented their own state heat standards, which vary in strength and coverage. Lawmakers seeking model policies can look to states like California, Maryland, and Oregon, where strong heat standards apply to both indoor and outdoor workplaces and there are clear temperature thresholds for when protections kick in.
  • Wildfire smoke: Wildfires are becoming more frequent and severe, yet there is no federal OSHA standard requiring protection from wildfire smoke. States can follow the lead of California, Oregon, and Washington, which have all promulgated rules that require employers to follow protocols to protect many workers, not just responders. Outdoor and indoor workers need protection from wildfire smoke when airborne particulate matter reaches a certain concentration threshold.
  • Ergonomics: Ergonomic hazards like repetitive lifting, twisting, and forceful hand and wrist motions have long been a leading source of workplace injuries, especially in industries like warehouse work, meat processing, health care, and construction. A federal ergonomics standard was enacted in 2000 but then promptly repealed by Congress. A few states have passed rules to protect workers in certain industries from musculoskeletal disorders, such as hotel housekeepers in California and meatpacking workers in Minnesota. New York recently passed a warehouse worker protection act that includes specific protections against musculoskeletal disorders, among other workplace health and safety concerns.
  • Workplace violence: Workplace violence has worsened over the past five years and is now the third-leading cause of death on the job, yet federal efforts to implement a workplace violence standard have so far been unsuccessful. California, however, is in the process of developing a general standard for workplace violence protections after the state legislature passed SB 553 and mandated comprehensive protections. Cal/OSHA had already implemented a workplace violence prevention standard for employees in health care industries. Several other states proposed standards this year.
  • Infectious disease: In the absence of a federal OSHA standard on airborne or aerosolized infectious disease, U.S. workers—particularly health care workers, low-wage workers, and workers of color—continue to face high risk of workplace exposure during major infectious disease outbreaks. A 2021 OSHA Emergency Temporary Standard established to address COVID-19 in health care settings was withdrawn six months later and OSHA’s stated intent to develop a broader infectious disease rule for health care remains in limbo. During the pandemic, at least 14 states implemented temporary COVID-19 worker safety protections. Other states, such as New York, have adopted limited infectious disease standards. Unfortunately, no state has adopted a comprehensive, enforceable measure yet.
  • Right to refuse work under dangerous conditions—including during climate emergencies: While federal OSHA law has some retaliation protections for workers refusing to work under dangerous conditions, they are weak and largely unenforced. It is therefore urgent that states take steps to ensure that workers may refuse to work under dangerous conditions without being subject to retaliation—and that they continue to be paid so long as the dangerous workplace condition remains unremedied. The need for this protection is only increasing as the climate crisis causes more severe and more frequent emergencies. Some states—such as California and Oregon—and localities like Miami-Dade County, Florida, have enacted laws that prohibit employers from taking adverse action against non-essential workers who refuse to continue work when emergency conditions are present or imminent.
  • Mandate injury and illness prevention programs (IIPPs): Federal OSHA does not have a specific standard to require an IIPP but has issued formal recommendations that employers adopt comprehensive safety programs. Several states, including California, Minnesota, and Washington, have created regulations that require that employers implement an injury and illness prevention plan.
  • Strengthen anti-retaliation protections for workers that voice concerns about safety and health hazards: Though federal OSHA law contains some language on protecting workers from retaliation when exercising their rights under the law, the provisions are weak and the OSHA offices that enforce the provisions are critically understaffed. Providing workers with a private right of action so that they may go to court if they are retaliated against is critical for ensuring workers are protected. States with existing whistleblower laws should expand them to protect workers who notify fellow workers or the public about workplace hazards (not just workers who file complaints).
• State plan states should strengthen existing standards: State plan states should increase protections for workers by implementing stronger versions of existing weak or outdated federal standards. State plan agencies can look to states like California and Washington, whose OSH agencies regularly pass the nation’s most stringent standards, for guidance.

Step III: Use proven strategies to increase effectiveness of enforcement, encourage compliance, and expand community awareness

• State plan states should implement targeted, more effective enforcement and penalty strategies. They should:
  • Increase agency resources and staff: Where possible, states should dedicate more resources to their state OSH agency. Like federal OSHA, state plans are plagued with staffing shortages that severely limit their ability to carry out regular, sufficient inspections. As of 2024, state plan states had an average ratio of one OSHA inspector per 84,937 employees.
  • Increase penalties to meaningful levels: Penalties are effective for deterring violations only if they’re substantial enough to compel employers to take notice and remove hazards. While state plans are required to maintain statutory maximum penalties that are at least equivalent to those of federal OSHA, Kentucky is one of several states that has failed to raise its penalties after Congress required OSHA to raise its penalties in 2016 and index them to inflation. There are also often significant disparities between the already low average penalties assessed by federal OSHA and the average penalties assessed by state plans, even among those that have adopted new maximums. In fiscal year 2024, the average penalty for a serious violation under federal OSHA was $4,083, compared with an average penalty under state OSHA plans of only $2,580. These penalties are far too low to serve as effective deterrents; state plan states should raise penalty rates substantially across the board. In addition, states should resist adopting the new federal OSHA penalty reduction policy that the Trump administration announced in July.
  • Implement instance-by-instance citations: States can use instance-by-instance citations to cite and fine employers for each individual iteration of a willful and serious violation. This strategy can have a significant impact by compounding OSHA’s otherwise low penalties. Washington’s Department of Labor & Industries, for example, fined a manufacturing company over $2 million after it found 31 willful serious, seven willful general, 94 serious, and more than 40 general violations across three of the corporation’s locations. 
  • Cite all involved employers for violations: It is often the case that companies do not directly employ many of the workers who perform tasks for them—work is often outsourced via other entities such as subcontractors, temporary agencies, and workers misclassified as independent contractors. Multiple employers may also operate at the same site. Federal OSHA has maintained a multiemployer policy since the 1970s, but it is underutilized and not regularly enforced. When workers’ safety rights are violated in situations that involve multiple employers, state plans should cast as wide a net of responsibility as is legally feasible and hold all involved companies that possess control over working conditions financially responsible.
  • Require workplace hazards to be addressed while citations are being contested: Federal OSHA and most state plans do not require employers to abate workplace hazards identified during an OSHA inspection while that violation is being contested. State plan states should require employers to address recognized hazards whether they appeal the violation or not, as is done in Washington.
• Monitor and expose routine violators: Federal OSHA’s Severe Violator Enforcement Program designates agency resources toward inspecting and monitoring employers that have “demonstrated indifference” to their OSH Act obligations. Severe violators are subject to additional inspections and are publicly listed on the Severe Violator Enforcement Program Log. This program has been found to be effective at deterring violations by peer employers. States can implement a state-level “wall of shame” like New Jersey’s Workplace Accountability in Labor List (WALL), a publicly accessible list of employers with outstanding wage/benefit theft or tax liabilities, and can issue press releases publicizing serious and willful violations by employers.
• Provide or require workers’ rights education: States can mandate that both youth and adults receive education on workplace health and safety and their rights under OSHA. For high school students, “workplace readiness” curricula—like the one implemented in California and those proposed in other states—can include education on workplace rights including health and safety protections. States can implement use of NIOSH’s “Youth@Work—Talking Safety” curriculum in schools and develop state-level versions of programs like the federal Susan Harwood Training Grants Program, which provides funding to nonprofit organizations to provide workplace health and safety training—particularly to marginalized workers in high-hazard industries.

Where to go next

This document is designed to be a primer on OSHA, as well as to provide insight into the complex relationship between the federal OSHA and state plan states. It is a first step for those interested in improving worker health and safety conditions in their state. It does not provide enough details to guide drafting of laws or regulations for your state. If you are interested in advocating for specific policies mentioned in this brief, please contact us at earn@epi.org. We will be happy to connect you with relevant health and safety experts and organizations for further technical assistance.

Additional recommended resources:

• AFL-CIO’s Death on the Job report
• AFL-CIO’s resources for workers
• Health & Safety resources from National Employment Law Project
• National Council for Occupational Safety and Health
• Workplace Justice Lab at Rutgers University

Acknowledgments

The authors are grateful to Debbie Berkowitz and Rebecca Reindel for their expertise and guidance.

{{1.}} These states are Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming. Puerto Rico also operates a state plan.

{{2.}} These states are Connecticut, Illinois, Maine, Massachusetts, New Jersey, and New York. The Virgin Islands also operate a hybrid plan.

Established in the wake of the Great Depression through the Social Security Act of 1935, unemployment insurance (UI) is a critical safety net program that provides a partial replacement of wages to workers who have separated from employment. UI helps workers and their families afford their basic needs during spells of unemployment. It also helps stabilize the macroeconomy by keeping dollars flowing to local economies where layoffs and job losses could otherwise result in harmful drops in aggregate demand. UI is a forward-funded reserve, accumulating tax dollars during periods of economic stability to support workers during economic downturns.

Federal law establishes UI as federal-state partnership. Under the existing framework, the federal government sets baseline program parameters and raises revenue through Federal Unemployment Tax Act taxes to cover state administrative costs (e.g., processing claims or maintaining state unemployment trust funds), provide technical assistance, and conduct performance monitoring. States are responsible for paying worker benefits, although the federal government typically covers at least half of the cost of “extended benefits” during recessions. States have significant discretion to determine key features of their UI programs, such as eligibility criteria, benefit amounts and durations, and financing mechanisms.

What are the threats to state UI programs?

Unemployment insurance programs face mounting threats—some that are new, some from long-standing structural weaknesses that have left many state UI programs chronically underfunded and ill-prepared for economic downturns. In particular:

1. The Trump administration aims to weaponize UI systems to advance its mass deportation agenda: All workers in the U.S. with legal status (regardless of citizenship or nationality) are eligible for UI benefits, though immigrants who lack work authorization are not. Despite this distinction, in April 2025, Secretary of Labor Lori Chavez-DeRemer issued letters warning state governors against granting UI benefits to noncitizen workers, including those legally authorized to work. The letters threatened to withhold federal funds and directed states to verify the immigration status of UI applicants. Further, the U.S. Department of Labor recently proposed a rule change around UI data collection that poses risks to applicant privacy and could expand the risk of UI data being used for immigration enforcement.
2. The Trump administration’s rollback of merit staffing opens the door to UI privatization: Project 2025 calls for states to “innovate” with their UI programs by approving “non-public” organizations to administer benefits. This would dismantle long-standing merit staffing guidelines that require benefits to be administered by impartial career civil servants. Weakening merit staffing risks putting UI administration in the hands of actors who may not be impartial or accountable to the public. Although privatization of UI is explicitly prohibited by the Social Security Act, this backdoor approach erodes the public nature of UI administration. Research shows that introducing a profit motive for vital public services often results in reduced service quality, little cost savings, and less transparency, oversight, and accountability.
3. UI programs suffer from long-standing weaknesses that undermine their effectiveness as a safety net and economic stabilizer: Although unemployment insurance is a critical lifeline for unemployed workers, benefit levels replace less than 40% of wages on average, leaving many workers unable to meet their basic needs and disproportionately discouraging UI take-up among women and workers of color in low-wage jobs. Many states have also shortened benefit durations below the historical standard of 26 weeks, despite research showing such cuts reduce recipiency without improving employment rates or program solvency. At the same time, taxable wage bases and employer tax rates have eroded, starving trust funds. Most states now fail to meet federal solvency standards. Many states also rely on outmoded technology and understaffed state agencies to administer UI benefits and federal funding to modernize state UI systems was recently rescinded by the Trump administration. Finally, restrictive eligibility rules exclude large swaths of the workforce, including part-time and low-wage workers, women, Black and brown workers, misclassified workers, independent contractors, undocumented workers, and the self-employed. These weaknesses leave UI programs chronically underfunded, inaccessible to millions, and ill-equipped to protect workers or stabilize the economy during downturns.
4. Project 2025 seeks to weaken UI eligibility criteria by circumventing suitable work standards: Under federal law, workers can remain eligible for UI if they decline job offers that don’t meet a reasonable standard of suitability. Suitability definitions can vary by state but often consider factors such as health and safety conditions, wages, skills match, commuting distance, or other job characteristics when determining suitability. Some states’ suitable work requirements weaken the longer a worker is unemployed. Despite evidence that continued UI eligibility leads to better job matches and job quality, Project 2025 proposes providing states with waivers to suitable work requirements. Should waivers to this critical UI standard be adopted, workers could be disqualified from UI for turning down any job offer, no matter how unsafe, low-paid, or ill-suited to their experience. This would fundamentally weaken UI’s ability to facilitate good job matching, while putting workers in a precarious financial position following a job separation.

State lawmakers must act now to strengthen UI programs ahead of the next crisis

States lawmakers have broad authority over UI benefits, eligibility, and the financing of their states’ unemployment insurance trust fund, meaning they wield substantial power to ensure programs’ solvency and effectiveness when an economic crisis materializes. In light of the Trump administration’s anti-growth, inflationary economic policy and a softening labor market, policymakers must act with urgency to fortify UI programs.

Step I: Update state funding mechanisms to solidify trust funds and set basic minimum benefit standards

In recent decades, lawmakers in many states have sought to replenish unemployment trust funds by paring back benefits and restricting eligibility criteria. These efforts have largely failed to restore fund solvency or improve employment rates and have instead caused considerable harm to workers. State policymakers have the authority and tools to modernize their programs in ways that protect solvency without undercutting protections for workers. Policymakers should:

• Raise and index the taxable wage base to reflect the typical worker’s income: States have broad discretion in setting their taxable wage base (TWB), provided it meets or exceeds the exceptionally low federal minimum of $7,000. (As of 2025, the median state TWB is only $14,000.) States should link or index their TWBs to typical wages in their state. Currently, 18 states index their TWBs to the state’s average weekly wage, including Oregon (TWB of $54,300), Hawaii ($62,000), and Washington ($72,800). This ensures UI revenues keep pace with growth in the state economy, while creating a more equitable tax base and strengthening trust fund solvency. Adjusting taxable wage bases also allows states to generate more revenue at lower State Unemployment Tax Act (SUTA) rates. For instance, applying a 5.7% rate to a $7,000 tax base generates $400 in revenue per worker, while a much lower rate of 3.8% applied to a $21,000 tax base generates $800—twice the revenue. 
• Guarantee a minimum of 26 weeks of potential benefit duration: An extensive body of research finds that longer UI benefits do not meaningfully discourage work and any resulting increase in unemployment duration is offset by improved job matching, as workers find jobs with higher pay or that better match their skills. Prior to the Great Recession, all states offered at least 26 weeks of potential benefit duration (PBD) to eligible workers. Policymakers should ensure UI programs guarantee a minimum of 26 weeks of PBD.
• Raise benefit levels to afford workers a minimum standard of living: Low benefit levels mean low-wage workers—should they even qualify for benefits—often receive benefits that are unlivable. As a stepping stone to more ambitious and meaningful benefit level increases, lawmakers should set minimum benefit levels that working families can survive on: a benefit amount of at least 30% of the state’s average weekly wage or $300 per week (indexed to median wage growth), whichever is greater.

Step II: Improve program access and benefits to levels that make UI fulfill its core objectives

Unemployment insurance is one of the most important tools for reducing the harmful, reverberating effects of unemployment and one of the most effective programs for combatting recessions. Providing adequate benefits to unemployed workers leads to better reemployment outcomes, keeps dollars flowing in local economies, and ultimately lends itself to a more productive and dynamic economy. To this end, state policymakers should:

• Strengthen program administration and remove barriers to UI access: Applying for UI benefits is often a complex process and serves as a barrier to entry to workers who are navigating job loss. Underfunding and inadequate staffing of state and local UI administrative offices can compound these problems. Lawmakers should ensure that state agencies and UI offices have adequate resources to help applicants navigate the process and quickly process claims. In addition, the Century Foundation and Philadelphia Legal Assistance provide a comprehensive set of recommendations for state policymakers and agencies seeking to modernize UI systems and reduce barriers to access.
• Automatically extend UI benefits in difficult economic conditions to strengthen the program’s role as a macroeconomic stabilizer: When UI programs do not scale with market conditions, this deepens the damage caused by recessions. To better leverage UI’s stabilizing potential, states should utilize the optional Total Unemployment Rate (TUR)-based extended benefit program to guarantee workers can receive up to 20 weeks of extended benefits during severe economic crises. As of 2023, only 27 states and territories utilize the optional TUR-based trigger. Although optional state extended benefit programs carry some budgetary costs, they can help mitigate the long-lasting scarring effects of an economic contraction. 
• Set benefit levels that offer real protection for workers: State laws governing wage replacement and benefit maximums vary widely, but some states have adopted benefit formulas that provide much stronger protection. For instance, in 2024, Hawaii’s program provided an average weekly benefit of $653 (57% of worker wages), Washington’s average weekly benefit was $722 (51% of wages), and Massachusetts’s was $704 (48% of wages.) The National Employment Law Project’s policy brief describes optimal formulas for computing benefits.
• Establish a dependent allowance to allow parents and caregivers to fulfill their obligations: Households with children are much more likely to face food and housing insecurity when a job is lost. Dependent allowances, already enacted in 13 states, can help mitigate these harms by recognizing the added burdens that caregivers face. Policymakers should adopt similar measures and define dependents broadly to reflect the diversity of family structures and care responsibilities.
• Make short-term compensation (“work-sharing”) more appealing for employers and workers: During economic downturns, employers often resort to layoffs to reduce costs, harming workers financially and businesses in lost skilled labor. Under a short-time compensation (STC) (or “work-sharing” arrangement), firms can reduce employee hours instead eliminating jobs, while UI benefits partially offset lost wages for workers. Currently 33 states have STC programs in place, but utilization remains uneven and low relative to comparable programs in OECD nations. States can strengthen STC programs by making firms of all sizes eligible, removing experience rating penalties, allowing employers to certify reductions in hours on behalf of workers, and ensuring earnings from other jobs are not counted against workers’ STC benefits. The Washington Center for Equitable Growth provides additional recommendations for reducing administrative barriers and engaging in employer outreach and education.

Step III: Modernize unemployment insurance to reflect the needs of a 21st century economy

The unemployment insurance system, designed in the 1930s, no longer reflects the realities of today’s workforce. It excludes many gig, part-time, and irregular workers, and inherits frameworks that are rooted in racism and sexism. Lawmakers should adopt more expansive frameworks for UI eligibility and accessibility by taking action to:

• Set progressive benefit levels that truly alleviate economic hardship: Policymakers can ensure UI systems truly alleviate economic hardship and strengthen worker bargaining power, while targeting those workers most in need, by progressively structuring benefits. A smart approach would replace at least 85% of wages for the lowest earners, gradually scaling down to 50% for high earners, and 30% for very high earners.
• Increase benefits duration to ensure workers have sufficient runway and better prospects when reentering the workforce: Evidence shows that when workers have a longer benefit runway, they have better reemployment outcomes, find jobs that better match their skills, earn higher wages, and are more likely to remain on the job. States should guarantee a minimum of 30 weeks of potential regular UI benefit duration.
• Raise or remove the ceiling on the taxable wage base: Policymakers can truly address solvency concerns by dynamically increasing or eliminating caps on taxable wage bases. States should set the TWB to at least half of the Social Security taxable wage limit ($176,100 as of 2025). Several states have successfully increased their TWBs by indexing to a high proportion of the average worker’s wage. Whether by raising the cap, indexing it to wages, or relinking it to the Social Security base, modernizing the taxable wage base would strengthen trust fund solvency and create fairer contributions across employers of low- and high-wage workers.
• Reform experience rating to eliminate harmful incentives to fight legitimate UI claims: Federal law requires states to adopt rules such that employers with higher rates of separations pay higher UI taxes. This approach, known as “experience rating” encourages workforce stability and helps ensure equity among employers by charging more of those who draw more heavily against unemployment trust funds. However, these rules create the perverse incentive for employers to block legitimate claims by encouraging workers to not file, challenging claims, or structuring their workforce to minimize the number of employees eligible for UI, such as relying on part-time or contract labor. States can remove these harmful incentives by experience rating employers based on changes in the number of hours worked by their employees or the number of workers they employ. Alaska, for example, implemented a “payroll decline quotient” method which ties tax rates to changes in payroll over time instead of the number of claims made by workers. Further, since some firms are indifferent to additional layoffs because of a capped experience rating tax, states can impose penalties on firms that persistently remain at the cap.
• Expand eligibility to all workers with demonstrated attachment to the labor force: State monetary eligibility rules should be reformed to guarantee coverage for all workers who demonstrate clear labor force participation. Rather than relying solely on workers meeting specific earnings thresholds, states should also allow workers to qualify based on hours worked. Specifically, any individual who works at least 300 hours during two quarters of a base period should qualify. This means a worker who performed 15 hours of work per week for 20 weeks across two quarters would be eligible for UI. Hours from all work arrangements should be counted toward the 300-hour minimum, given that low-paid workers often hold multiple jobs across different employers. States should also extend the base period for determining eligibility to six quarters of work, to prevent low-paid, seasonal, and temporary workers from falling through the cracks. Oregon is currently the only state with a hybrid model allowing workers to qualify based on either earnings or hours.
• Reform work-search requirements to account for issues that workers commonly face: Overly onerous work-search requirements increase benefit denials while failing to save money for UI programs. States should ensure work-search requirements are not so burdensome that active jobseekers lose UI benefits before finding a new and suitable job. For instance, states should allow workers to continue receiving benefits if they have good cause for missing an appointment or work-search verification. If a worker falls short of work-search requirements, they should lose benefits only for that week, instead of being permanently removed from the program. States should also allow workers engaged in education or training programs that may boost their employment prospects to continue receiving UI benefits. Further, they should ensure continuing eligibility for workers available for part-time work, not just those seeking full-time work.
• Enact strong suitable work requirements to boost worker reentry prospects: A core function of UI is to promote stable, quality reemployment; workers should remain eligible for UI if they decline a job that is a poor match for their skills or of substandard quality. The National Employment Law Project provides recommendations that states can adopt to ensure strong suitable work criteria, including: 1) comparing the wage offered by a new job to the occupation’s prevailing wage and factoring in the worker’s expertise, training, and experience; 2) maintaining standards of suitable work that do not weaken based on the length of unemployment; and 3) reviewing offers for temporary employment under a lens of prevailing labor market conditions.
• Expand eligibility criteria to cover workers compelled to leave their jobs for valid reasons: Historically, the UI program has failed to account for many of the reasons that might compel a worker to leave their job. States should adopt stronger good-cause quits provisions that include reasons such as leaving due to unsafe conditions, caregiving responsibilities, or harassment, while exploring broader eligibility criteria that provide benefits to workers who quit.
• Extend UI eligibility to striking workers: Allow workers engaged in labor disputes to access UI benefits under the same rules as other unemployed workers. While some states impose extra waiting periods for striking workers, policymakers should adopt no or minimal additional delays.
• Establish joblessness protections for independent contractors, self-employed, and undocumented workers: To function as a true safety net UI should cover all labor force participants, including self-employed workers, independent contractors, and undocumented workers who lose work. In recent years, California, Colorado, and New York have pioneered successful initiatives for covering contractors, self-employed, and undocumented workers. States should explore options for establishing similar programs to ensure workers excluded from traditional UI have access to similar safety net protections.
• Adopt clear legal standards to combat worker misclassification: When workers are wrongfully classified as independent contractors, they lose the labor protections of W-2 employees, including UI eligibility. Misclassification imposes heavy costs on both workers and state trust funds. Policymakers can address this by adopting Pennsylvania’s model, which presumes that any worker performing services is an employee unless the employer proves that 1) the worker is free from the employer’s control or direction in performing work and 2) the worker is customarily engaged in an independently established trade or business.
• Design programs to protect workers’ privacy: While some states have expanded wage records to include details such as occupation, industry, or work hours to better evaluate job quality and improve services, UI programs should ensure workers can apply for benefits without risking retaliation or exposure of sensitive personal data. The Century Foundation and Immigration Research Initiative recommend limiting data collection to what is necessary, prohibiting disclosure for nonprogram purposes, and requiring data safeguards, while allowing applicants to self-attest wherever possible. To ensure accountability, violations of privacy rules should carry clear penalties. This year, Maryland lawmakers introduced legislation to protect state databases from unauthorized sharing and immigration inquiries, offering model language for policymakers seeking to protect state data more broadly.

Additional recommended resources

• National Employment Law Project (NELP)’s State Unemployment Insurance Policy Hub;
• Reforming Unemployment Insurance: Stabilizing a System in Crisis and Laying the Foundation for Equity—a joint report of the Center for American Progress, Center for Popular Democracy, Economic Policy Institute, Groundwork Collaborative, National Employment Law Project, National Women’s Law Center, and Washington Center for Equitable Growth;
• The Century Foundation’s Unemployment Insurance Data Dashboard. 

Editor’s note: This piece was revised on October 8, 2025, to add an “Additional recommended resources” section and clarify the need to increase UI funding both to strengthen benefits and ensure effective UI program administration.

The overtime provisions of the Fair Labor Standards Act (FLSA) provide protections to most hourly workers and many low-salaried workers, guaranteeing time-and-a-half pay for hours worked in excess of 40 a week. FLSA overtime rules apply to all private businesses with annual revenue of at least $500,000, as well as hospitals, care centers, schools, and public agencies. Because federal law otherwise sets no limits on the hours employers can require people to work (and no requirements for rest breaks or days off), overtime pay is an especially important policy to disincentivize overwork and encourage employers to share work across more employees, bolstering hiring.

What are the threats to federal overtime protections?

Current threats to overtime pay include:

• Excluding workers from overtime by lowering the salary threshold for automatic eligibility: The first Trump administration took action to lower the salary threshold at which workers become automatically eligible for overtime pay when they work more than 40 hours in a week, denying eligibility to millions of low-salaried workers. It is widely anticipated that the second Trump administration will likewise block a new proposed rule to raise the salary threshold, again denying coverage to millions of workers who earn between $35,568 and $58,656 (likely by refusing to defend the rule against ongoing court challenges from business groups).
• Stripping overtime coverage from direct care workers: The Trump administration has proposed rule changes that would reverse a 2013 regulation expanding overtime coverage to include “direct care” workers, such as home health aides and certified nursing assistants, employed by agencies.
• Allowing employers to deny overtime pay: Proposals laid out in Project 2025 recommend altering the FLSA to allow employers broad new discretion to deny workers overtime pay by altering calculations of what counts as a workweek, substituting time off in place of overtime pay, and/or deeming remote employees ineligible for overtime pay.
• Increasing likelihood of underpayment or nonpayment of overtime: Failure to pay overtime is one of the most common forms of wage theft, and diminished U.S. Department of Labor (DOL) capacity to enforce wage and hour laws will exacerbate this problem.

How can states maintain and strengthen overtime protections?

States have legal authority to establish their own overtime standards so long as they are at least as protective as those in the FLSA; federal overtime laws set a floor above which states can adopt and enforce their own stronger standards. Given the very real risk that aspects of FLSA overtime protections could be eliminated (or will go unenforced), it is important for states to at least lock in existing FLSA overtime protections. Additionally, states should seek to go beyond the current floor, as some FLSA provisions—such as those exempting certain categories of workers from overtime—are long overdue for an update.

Step I: Update state statutes to lock in current federal protections

Because for decades most states have deferred to the FLSA’s overtime standard and relied at least in part on federal enforcement of overtime laws, existing overtime language in state statutes is often outdated, incomplete, or inadequate. For example:

• Minnesota state law only requires overtime after 48 hours of work in a week; in Kansas it is 46. These laws are of no practical import right now, because the FLSA overrules them, but in the absence of FLSA protections, workers in these states would have to work more hours to qualify for overtime.
• In several states—including Iowa, Oklahoma, Tennessee, and others—there is no state statutory right to overtime. At present, workers with unpaid overtime claims in these states can only go to the federal government for redress, meaning that if DOL lacks adequate enforcement capacity, workers’ recourse may become limited. Moreover, while the FLSA currently covers workers in all states, if FLSA overtime protections disappear, workers would have no right to overtime pay at all in these and other states with no overtime language in state code.
• Some states, like Hawaii and Michigan, do require overtime pay after 40 hours in a workweek but currently exclude employment that is subject to the FLSA from state coverage. States with such exclusions should remove them to ensure consistent state coverage and enforcement jurisdiction, rather than expecting some workers to rely solely on tenuous federal overtime standards and enforcement.

Many states, such as New Jersey, New Mexico, and Pennsylvania, already mirror the basic overtime provisions of the FLSA, guaranteeing overtime pay after 40 hours in a workweek. Lawmakers in other states should act quickly to ensure their state codes at a minimum follow suit. There is no harm in codifying overtime protections in state law even if federal standards don’t change, whereas delaying updates to state law puts workers at risk of real harm if federal protections are diminished or left unenforced.

One legislative model for states to consider is the 2025 “trigger law” enacted in Illinois that directs state agencies to ensure all state wage and hour standards remain at least as protective as existing federal wage and hour standards in the event that federal standards are weakened or eliminated. 

State overtime rules, if they exist, are typically part of state labor and employment or wage and hour statutes. Policymakers and advocates should review their state’s laws to assess whether overtime language codifies at least the same level of protection currently provided under the FLSA and to ensure that the state has the power to enforce its own overtime laws without relying on the federal government.

Step II: Close critical gaps in overtime coverage

While the FLSA sets an important floor for overtime pay, it is an 80-year-old statute with notable gaps in coverage that state policymakers should try to close. Priority steps states can take to update overtime coverage include:

1. Eliminate occupational exemptions: Agricultural workers are not covered by the FLSA, a racist holdover from when the act was initially passed in 1938. And while some domestic service workers such as nannies and house cleaners were covered in 1974, certain home care workers providing care for seniors and persons with disabilities remain excluded. A 2013 Obama-era rule that extended coverage to many home care workers is at risk of being rolled back by the Trump DOL. Other exceptions apply to smaller categories of workers. States have it in their power to eliminate these exemptions. For example, several states—including California, Washington, and Colorado—already cover agricultural workers under state minimum wage and overtime laws. And some states like California have already taken action in 2025 to ensure that state law will guarantee home care workers overtime pay in response to proposals to remove existing federal protections. 
2. Raise and automatically update the salary threshold for exemption of workers in executive, administrative, and professional (EAP) jobs: Currently, workers in EAP roles are exempt from FLSA overtime requirements if they earn more than $684 per week. The Biden administration issued a rule to update that threshold to $844 per week in 2024, $1,128 per week in 2025, and to automatically adjust for inflation thereafter. This rule was blocked by the courts and there is every expectation that the Trump administration will not defend the new rule. States can move to lock in the new threshold and assure regular future updates. Six states—Alaska, California, Colorado, Maine, New York, and Washington—already have an EAP salary threshold above the federal level. For example, Washington will by 2028 remove the exemption for any employee making the equivalent of 2.5 times the state minimum wage or less. Because the state minimum wage is indexed to inflation, the state’s salary threshold will continue to rise with the state minimum wage.

Step III: Modernize overtime policies to fit today’s economy, improve safety and productivity, and promote work-life balance

In addition to codifying FLSA overtime rules and closing coverage gaps, there are many steps states can take to serve priority policy goals like preventing overwork, stabilizing work schedules, and increasing work-life balance. Indeed, overtime pay was incorporated into the 1938 FLSA as a compromise, following decades of international worker struggles for the eight-hour day and during a period of intense debate over whether public policy should place some limits on the often near-absolute control many employers exerted over workers’ time. These are questions worth revisiting in the context of state policymaking today, when overtime pay alone has failed to curb excessive use of forced overtime or scheduling practices that in some industries include dangerously long shifts or months of consecutive shifts with no days off, both of which are closely correlated with declining productivity and adverse health and safety impacts.

1. Add overtime pay to discourage excessively long shifts, encourage periodic days off, and promote fair scheduling. Many state laws include useful examples of overtime policies targeted at discouraging excessive consecutive hours of work or days of work without time off:
   • California mandates that workers receive double time (not just time-and-a-half) after 12 hours of work in a day.
   • In Alaska, overtime pay applies to all eligible employees working more than eight hours in a day. Other states have more limited expansions; for example, Oregon requires manufacturing employers to begin paying overtime after 10 straight hours.
   • A number of states, including Alaska, Florida, Nevada, and Oregon, make some employees eligible for overtime pay after a certain shift length, regardless of the number of hours worked in the week.
   • Kentucky requires overtime pay for all work done on a seventh straight day of work. California requires overtime pay for all work done beyond eight hours on a seventh straight day of work.
   • Fair scheduling laws, which Oregon and a number of cities have adopted, similarly require employers to provide advance notice of schedules and extra pay for schedule changes. Some laws also crack down on “clopenings”—the practice of requiring an employee to work late in the evening and start again early the next morning—by requiring extra pay for shifts within 12 hours of each other.
2. Guarantee rights to refuse excessive forced overtime: States could also ensure that hourly workers have the right to decline excessive overtime hours without fear of retaliation. For example, Maine proposed legislation to protect overworked paper industry workers—who were sometimes forced to work 24-hour shifts—guaranteeing a right to refuse more than two hours of overtime in a day, and requiring seven days advance notice of schedules.
3. Expand overtime laws to incentivize transitions to shorter work weeks: Well before passage of the FLSA and up to the present day, workers and advocates have proposed that productivity gains should result in shorter work hours (with no loss of pay). Numerous versions of proposals to move to a four-day or 32-hour standard work week have been introduced in several states, including pilot and study bills. State expansions of overtime pay to hours worked beyond 32 in a week (or other numbers less than 40) could help incentivize shifts toward shorter work weeks.
4. Look to tested overtime language in collective bargaining agreements for policy models: Collective bargaining agreements negotiated between unions and employers often contain more expansive overtime and scheduling provisions that can serve as models for more ambitious policy ideas. For example, language in such agreements may list additional circumstances when overtime or other forms of premium pay are required for work on weekends, holidays, on-call hours, or following scheduling changes. These agreements may also set out processes for workers to accept or decline additional work hours or new shift assignments, timelines for employers to provide notice of work schedules, fair procedures for assigning overtime, and more.

Additional recommended resources 

• State minimum wage [and overtime] laws (U.S. Department of Labor) 

• Overtime laws by state (Bloomberg Law) 

• Explaining the Department of Labor’s new overtime rule that will benefit 4.3 million workers (Economic Policy Institute) 
• Home care worker rights in the states after the federal companionship rules change-2013 (National Employment Law Project; note that this resource is an excellent tool for identifying relevant state code sections, but may not reflect more recent changes to state laws) 

Editor’s note: This piece was revised on October 24, 2025, to add an “Additional recommended resources” section and include updates on federal and state policy developments that took place after initial publication. 

The Fair Labor Standards Act (FLSA) establishes a “floor under wages” mandating that employers pay covered employees no less than a minimum hourly rate for all hours worked, whether they are paid on an hourly or salaried basis. The current federal minimum wage is $7.25 per hour—a rate set in 2009. FLSA minimum wage rules apply to all private businesses with annual revenue of at least $500,000, as well as hospitals, care centers, schools, and public agencies. 

The FLSA exempts a variety of specific occupations from the minimum wage, such as newspaper delivery workers, seasonal farm workers, workers in commercial fisheries and canneries, private investigators, and babysitters. It allows workers under 20-years-old to be paid as little as $4.25 per hour for their first 90 days of employment. The FLSA also allows employers who have been granted a certificate from the U.S. Department of Labor (DOL) to pay less than the minimum wage to employees with disabilities. It also allows employers to pay workers who customarily receive tips as little as $2.13 per hour, so long as the tips they receive over the course of a workweek bring them to an average hourly combined wage (tips plus base wage) of at least the minimum wage.

What are the threats to federal minimum wage protections?

• Allowing the value of the minimum wage to continue to erode: Since the federal minimum wage was last raised in June 2009, its value has declined by 30%. At its 1968 high point in inflation-adjusted terms, the federal minimum wage was worth roughly $12 in 2024 dollars. In 2019, the U.S. House passed a bill to gradually raise the federal minimum wage to $15 and then automatically update it for inflation every year thereafter; however, the Senate never took up the bill. Every year it remains unchanged, the purchasing power of the minimum wage erodes, undermining wage growth for millions of low-wage workers, including many earning wages above the minimum. Moreover, without an increase, the gap between the current minimum wage and what would constitute a true living wage gets larger—making any eventual effort to reach a living wage more challenging.
• Continuing to subject tipped workers to a lower and difficult-to-enforce subminimum wage: The subminimum wage for tipped workers was set in 1991 at $2.13 per hour and has not been raised since. At such a low level, many tipped workers effectively receive no pay from their employers; their take-home pay comes entirely from what they receive in tips. Consequently, tipped workers’ income is volatile and unpredictable, and they can be subject to abuse by customers and employers who, in every shift and transaction, hold power over tipped workers’ pay. Although the FLSA requires that employers must “top off” workers’ paychecks if their tips do not make up the difference between the tipped minimum and full minimum wage, this requirement is notoriously hard to enforce.
• Denying minimum wage coverage to some groups of workers: The Trump administration has already taken initial steps to roll back existing DOL rules that ensure minimum wage coverage for direct care workers (home health aides) and has withdrawn a proposed rule that would have phased out programs allowing payment of subminimum wages to workers with disabilities. Proposals laid out in Project 2025 recommend altering the FLSA to allow states to seek waivers to core FLSA provisions—which could open the door to exclusions of additional groups of workers from coverage.
• Increasing likelihood of underpayment: Failure to pay the minimum wage is one of the most common forms of wage theft and diminished DOL capacity to enforce federal wage and hour laws will exacerbate this problem.

How can states maintain and strengthen minimum wage protections?

States have legal authority to establish their own minimum wages that are higher and more expansive in coverage than the federal minimum. Given the very real risk that aspects of FLSA minimum wage protections could be eliminated (or will go unenforced), it is important for states to at least lock in existing FLSA minimum wage protections. However, states should seek to go beyond the current floor, as the federal minimum wage is far too low and does not cover all workers.

Step I: Update state statutes to lock in current federal protections

Because updates to the federal minimum wage have been infrequent and inadequate over the last 40 years, many states—though not all—have established their own minimum wages. The strength of these laws varies greatly. For example:

• 30 states and the District of Columbia have set minimum wages higher than the federal minimum, ranging from $8.75 in West Virginia, to $16.66 in Washington, and $17.50 in the District of Columbia.
• Five states (Tennessee, South Carolina, Louisiana, Mississippi, and Alabama) have no state minimum wage. Two states (Georgia and Wyoming) have state minimum wages below the federal minimum. The federal minimum wage applies in these states to all workers covered by the minimum wage under the FLSA.
• Some states (such as New Hampshire, Idaho, North Carolina, and Texas) set the state minimum to explicitly equal the federal minimum (whatever it may be), while others have set it specifically at $7.25.

To lock in current federal minimum wage protections, states should:

1. Guarantee a strong state minimum wage floor: States without a minimum wage or with one lower than the federal minimum should enact one that is at least as strong as the federal minimum wage—and ideally stronger. States should codify that the state minimum wage always equals the greater of the federal minimum wage or whatever higher explicit value state lawmakers or voters (in the case of a ballot measure) set.
2. Ensure the state minimum wage covers at least those workers covered by the FLSA: Most states, though not all, link coverage of their state minimum wage to the coverage definitions in the FLSA. States should consider spelling out coverage definitions in state code so that currently covered workers remain covered if federal coverage definitions are eroded to exclude certain groups or occupations in the future.
3. Ensure state agencies have authority and capacity to enforce minimum wage laws: Many states rely, at least in part, on federal enforcement of wage and hour laws. Florida, for example, will have a $15 minimum wage in 2026, yet has no state-level wage and hour enforcement body.

State minimum wage rules are typically part of state labor and employment or wage and hour statutes. In some cases, they are set in state constitutions—the result of citizen-initiated ballot measures. Policymakers and advocates should review their state’s labor laws to assess whether their state minimum wage laws codify at least the same level of protection currently provided under the FLSA, and to ensure that the state has the power to enforce its own minimum wage laws without relying on the federal government.

Step II: Raise the minimum wage to an adequate level, set it for automatic annual increases going forward, and eliminate harmful exemptions

While the FLSA sets an important floor for minimum pay, the current level is woefully inadequate and there remain notable gaps in coverage that state policymakers should close. Priority steps states can take to update the minimum wage include:

1. Gradually raise the minimum wage to at least $17 per hour by 2028: Today, there is no county in the country where a single, childless worker can achieve a modest, but adequate standard of living on a wage of less than $15. By targeting at least $17 by 2028, states can raise their minimum wages to an adequate level allowing for any inflation that may occur as the new wage floor is gradually phased in.
2. Gradually raise and eliminate the subminimum wage for tipped workers: There are currently seven states where tipped workers are paid the regular minimum wage, regardless of tips. In these states, tipped worker wages are higher, poverty rates are lower, and the restaurant industry thrives. States should gradually increase the minimum wage that applies to tipped workers (or reduce any “tip credit” employers can claim against their minimum wage obligation) so that eventually all workers are paid the full minimum wage regardless of any tip income.
3. Index the minimum wage for inflation: States should establish that once the minimum wage has reached at least $17 per hour, it must be automatically updated each year to account for any growth in prices over the preceding year. There are 20 states and D.C. that already have automatic inflation-adjustment built into their state minimum wage laws. Most require that the minimum wage be raised the same percentage as any change in the Consumer Price Index (CPI-U) over a preceding 12-month period, rounded to the nearest 5 cents. If the CPI-U decreases, the minimum wage should not be lowered.
4. Codify minimum wage coverage for direct care workers: As noted above, the 2013 FLSA rule that clarified minimum wage and overtime coverage for home care companions who provide direct care services for seniors and persons with disabilities is under attack in the courts, and the Trump DOL has taken initial steps to reconsider it. To protect such workers from losing these key protections, states should ensure that their wage and hour laws clearly cover them. In states where they are exempted or where state coverage of such workers depends on FLSA coverage (such as Connecticut), state laws should be updated to clearly cover such workers, regardless of what happens to the federal rule.
5. Eliminate harmful minimum wage exemptions: Agricultural workers are not covered by the FLSA, a racist holdover from when the act was initially passed in 1938. Other exceptions apply to smaller categories of workers. States have it in their power to eliminate these exemptions. For example, several states—including California, Washington, and Colorado—cover agricultural workers under the state minimum wage. Also, many states have a “training wage” allowing workers—often only those under age 20 or in school—to be paid less than the full minimum wage. Lawmakers should consider whether these training wages are necessary, and if they are maintained, they should be limited to a short period (e.g., 30 days) after a worker’s initial hiring.
6. Ensure localities can establish their own minimum wages above the state minimum: There are nine states in which a city or a county has established a local minimum wage that exceeds the state minimum—with nearly 60 local minimum wages now in effect. Because costs of living can vary considerably within a state, local governments should be able to establish higher wage standards if the people in those localities deem that the state wage floor is inadequate. There are 25 states where state law currently prohibits local wage minimum wages. Lawmakers in those states should reverse that prohibition.

Step III: Modernize minimum wage policies by establishing stronger mechanisms to adjust the level of the minimum wage over time

In addition to codifying FLSA minimum wage rules, setting an adequate minimum wage level, and closing coverage gaps, there are other steps state lawmakers can take to ensure all workers can afford a decent life and benefit from a growing economy.

1. Set the minimum wage to automatically adjust each year based on growth in prices or median wages—whichever is greatest: Indexing the minimum wage to changes in prices ensures that low-wage workers can buy the same amount of goods and services year after year. But as the economy grows and productivity rises, low-wage workers’ standard of living should improve, not just stay the same. Instead of indexing the minimum wage to price changes, lawmakers can index the minimum wage to changes in the median wage.
   • Linking the minimum wage to the median wage ensures that the gap between the lowest paid job and a “middle-class” job never grows; as a middle-class worker’s pay rises, so would pay for a minimum wage worker.
   • Over the long run, wage growth should outpace price growth, but on a year-over-year basis, that may not be true and in some years, median wages could decline. The law should be written such that the minimum wage never goes down and is raised at least as much as any increase in prices—and more when wage growth exceeds price growth.
2. Establish wage boards to periodically evaluate the strength of the minimum wage overall and for specific industries: In some countries—such as the United Kingdom— minimum wage levels are set by boards or commissions (composed of nonpartisan analysts, worker representatives, and members of the business community) that periodically review the level of the minimum wage and recommend changes. In some states—such as in New York and California—there are wage boards for individual industries, such as fast food, that set minimum wages (and potentially other workplace standards) for all workers in that industry. Policymakers should consider establishing or creating mechanisms allowing for such boards to periodically review whether the state minimum wage level is adequate for workers overall, and/or for those in industries with large numbers of low-wage workers.

Additional recommended resources 

• Why the U.S. needs at least a $17 minimum wage (Economic Policy Institute) 

• The impact of the Raise the Wage Act of 2023 (Economic Policy Institute) 

• Minimum Wage Tracker (Economic Policy Institute) 

• Most minimum wage studies have found little or no job loss (Economic Policy Institute) 

• Minimum Wage for Agricultural Workers (The National Agriculture Law Center) 

• Low Wage Workforce Tracker (Economic Policy Institute) 

Editor’s note: This piece was revised on October 23, 2025, to add an “Additional recommended resources” section.

The 1938 Fair Labor Standards Act (FLSA) sets guidelines for the hours and nonhazardous jobs for which employers can hire minors under 16. The FLSA also empowers the Secretary of Labor to prohibit all minor employment in occupations that are particularly dangerous through “hazardous occupations orders.” It covers employers that conduct at least $500,000 in annual sales or any employees engaged in interstate commerce (this coverage is interpreted broadly with respect to child labor—if a firm engages in any form of interstate commerce, its minor workers are covered). Federal law sets an important but limited and increasingly outdated floor for child labor standards. For example, federal child labor standards in agriculture are much weaker than in nonagricultural employment, hazardous occupations orders have not been updated in decades, and there are no work hours protections for minors over the age of 15 (see Table 1).

Table 1

What are the threats to federal child labor standards?

Threats to federal child labor standards include federal proposals to weaken child labor protections and ongoing state-level efforts to erode the FLSA by proposing or enacting state child labor legislation that conflicts with federal law:

• Project 2025, the anti-worker policy roadmap being implemented by the Trump administration, proposes:
  1.  Eliminating federal hazardous occupations orders, which protect minors from employment in particularly dangerous jobs, like mining and roofing; and
  2. Allowing states to obtain waivers from the FLSA—including provisions that prevent harmful forms of child labor.

• In recent years, a coordinated, industry-backed campaign to erode child labor standards has generated proposals in dozens of states to weaken or eliminate state standards exceeding the minimal federal “floor” for child labor protections. Some state lawmakers have gone even further, proposing or enacting bills that directly conflict with federal minimum standards, while stating intent to build pressure for the eventual relaxation or elimination of FLSA standards for the whole country. Common targets for these attacks on state child labor standards include:
  • Eliminating youth work permits
  • Eliminating hours of work guidelines for 16- and 17-year-olds
  • Eliminating meal or rest break requirements for minors
  • Expanding employers’ ability to hire minors for previously prohibited hazardous jobs
  • Lowering the age at which minors can serve alcohol and/or work in establishments serving alcohol
  • Establishing or expanding laws that allow employers to pay students or other youth a subminimum wage
  • Creating new exemptions from state child labor protections, for example for homeschooled youth or youth in certain occupations
  • Creating new systems—such as unregulated “internship” or “work-based learning” programs—that allow employers to skirt child labor laws or hire minors for otherwise prohibited hazardous work

By repeatedly proposing—and in some cases implementing—standards that conflict with federal law, these states are chipping away at the already fragile federal floor for workplace protections.

How can states maintain and strengthen child labor protections?

States have legal authority to establish their own child labor standards; the FLSA sets a floor above which states can adopt and enforce their own stronger standards.

States have historically played a prominent role in setting child labor standards—some states have protections in place that predate the FLSA, and many have long legislated above federal law. Other states maintain standards that generally mirror the FLSA, with few additional protections, and some states have standards that are significantly weaker than the FLSA. In many cases, a state’s standards are stronger than the FLSA in some areas and weaker in others. When a state standard is weaker than the FLSA, federal law applies. However, since only federal agencies can enforce federal laws, state laws that fall short of federal law increase the risk of federal violations while shifting the enforcement burden to already-overburdened federal agencies. Amid Trump administration attacks, federal agencies are now facing even more pronounced staffing shortages that will further limit their enforcement capacity.

In response to increasing child labor violations, many states are already taking action to strengthen state child labor standards and enforcement. Given the very real risk that aspects of FLSA child labor protections could be eliminated (or will go unenforced), all states should at a minimum lock in existing FLSA standards and ensure state capacity to enforce them. Beyond this, states have critical opportunities and responsibilities to modernize child labor standards beyond the minimal, outdated FLSA floor to ensure that minors who must work or choose to work can access safe work experiences that don’t harm their health or education. Fortunately, state lawmakers have an array of options to consider and tested legislative models to use as a guide.

Step I: Update state statutes to lock in current federal protections.

State standards should be at least as strong as those in the FLSA. Ensuring that state standards mirror FLSA minimums protects both employers and children from the risks and confusion that arise when state standards contradict federal law. For example, after a Utah employer was fined for violating federal child labor law for incorrectly following state child labor guidelines that were weaker than FLSA standards, Utah enacted a bill to align state guidelines on hours of work for minors under 16 with FLSA standards.

Weaker standards often appear in areas of state code covering work hours or prohibited hazardous occupations. For example:

• Idaho allows employers to schedule 14–15-year-olds up to nine hours a day or 54 hours per week. Federal law allows employers to schedule 14–15-year-olds up to three hours a day or 18 hours per week in a school week and up to eight hours per day and 40 hours per week in a nonschool week.
• Iowa allows employers to hire 14-year-olds in industrial laundries and 15-year-olds in light assembly work, among other weaker standards. Federal law does not permit 14–15-year-olds to work in these settings.
• West Virginia allows employers to hire 16–17-year-olds enrolled in a “youth apprenticeship program” for all 17 hazardous occupations prohibited for minors under federal law. Federal law allows 16–17-year-olds to perform certain types of intermittent work in only seven of these occupations when enrolled in a bona fide registered apprenticeship program meeting certain stringent standards.

State policymakers should review their child labor statutes alongside federal child labor laws to identify areas of weakness. At a minimum, states should ensure that their guidelines for hours of work and hazardous occupations orders are at least as protective as the FLSA.

Step II: Close coverage gaps and address weaknesses in FLSA minimum protections

States can address many longstanding limitations and gaps in federal child labor protections. Examples of priority actions for state lawmakers to consider include:

1. Maintain effective youth work permit systems: Youth work permits have been shown to reduce child labor violations and aid in enforcement. The FLSA suggests—but does not require—that employers maintain certificates confirming the age of minors they employ. It also does not require minors to receive a permit as a condition of employment. Instead, youth work permit policies have historically been left to states. Most states already have some sort of permit system in place. Youth work permits are often simple, one-page forms that engage employers, parents, youth, and sometimes educators, in ensuring a child’s employment is legal, safe, and age-appropriate. Permits remind employers of existing child labor laws, inform parents of their child’s rights and affirm their consent, and aid state agencies in investigations of potential violations. States without work permit systems should implement them and states with existing work permit systems should assess and modernize their systems, as recently done in Illinois and New York and proposed in California.
2. Implement or expand work hour guidelines for 16- and 17-year-olds: The FLSA sets standards to protect children from excessive hours of work, especially during the school year. However, the FLSA was passed at a time when fewer than half of students completed high school, and its hours of work guidelines have never been updated to cover older minors (16- and 17-year-olds). In the absence of state standards, older teens can be scheduled to work unlimited hours per day or per week, including during school weeks. Some states have already adopted standards to address this gap, but fewer than half of states have hours guidelines in place for older teens. States should set maximum daily and weekly work hours for 16–17-year-olds and prohibit overnight work during the school week. Minimum standards should include limiting employers to scheduling 16–17-year-olds for no more than 32 hours in a school week, as nine states already do,{{1}} and prohibiting employers from scheduling 16–17-year-olds to work after 10 p.m. or before 6 a.m. (or similar), as 20 states and D.C. already do.{{2}}
3. Update prohibitions on hazardous child labor: The FLSA prohibits minors under 18 from working in a list of 17 nonagricultural occupations and 11 agricultural occupations that have been found to be particularly hazardous for minors. Many of these hazardous occupations orders have never been updated. And new orders have not been created to account for new forms of hazards in our modern economy, particularly in agriculture. Moreover, the FLSA opens the door to dangerous exemptions from some hazardous orders,{{3}} with language that allows student apprentices and learners enrolled in approved training programs to do certain types of hazardous work under close supervision. State lawmakers can update prohibitions on hazardous child labor by expanding existing hazardous orders, creating new orders to cover hazardous occupations not covered under federal law, and ending student learner and apprentice exemptions. Lawmakers can use the 2002 National Institute for Occupational Safety and Health recommendations to the U.S. Department of Labor as a guide for revising state hazardous orders. For example, Illinois recently updated and clarified state law to prohibit employment of minors in hazardous workplaces not covered under federal law, such as gun ranges and establishments primarily involved in the sale of tobacco or alcohol.
4. Extend equal protections to children working in agricultural occupations: Agriculture is the most dangerous sector of employment for minors, yet federal child labor standards remain much weaker in agriculture than in nonagricultural industries. State lawmakers can address this longstanding gap in federal law by aligning agricultural child labor standards for work hours and hazardous work with standards for nonfarm work. For example, in 2025, New Jersey lawmakers introduced a bill to raise the minimum age for agricultural employment to 14 and align work hours and hazardous work protections in agriculture with nonagricultural standards, among other updates to protections for farmworkers of all ages.
5. Increase civil penalties to deter violations and update them based on inflation: Under most existing state penalty structures, civil monetary penalties for child labor violations are very limited and, in some cases, nonexistent. Some states levy no civil penalties at all, and many states have not reviewed or updated penalty amounts in decades. In Indiana, for example, penalties range from a warning letter for an initial violation to a maximum of only $400 for a fourth violation within two years. Low or nonexistent penalties that can easily be absorbed as a “cost of doing business” do not deter employer violations and leave state enforcement agencies with few tools for ensuring compliance by bad actors. To ensure penalties serve as effective deterrents and enforcement tools, state lawmakers should set meaningful minimum penalties for first offenses and very high maximum penalties for serious or repeat offenses, as Illinois did in 2024. States can use federal civil penalties and annual adjustments as a benchmark; for example, current federal maximum civil penalties for a child labor violation range from $16,035 to $145,752, and rates are adjusted for inflation each year.
6. Strengthen state enforcement capacity and authority: Ensuring adequate state enforcement of child labor laws will become particularly important as federal enforcement capacity is diminished.
   • States should ensure funding for dedicated child labor enforcement staff so as not to take resources away from other wage and hour investigations. For example, a Virginia lawmaker recently requested an increased budget appropriation for child labor enforcement.
   • States should grant labor agencies sufficient authority to fulfill enforcement goals. For example, Nebraska recently enacted a bill that gives its labor agency power to subpoena records from employers suspected of violating the law.
7. Eliminate youth subminimum wages: The FLSA allows workers under age 20 to be paid as little as $4.25 per hour for their first 90 days of employment and allows employers to pay a lower minimum wage to full-time students in certain occupations, student learners, and apprentices. In recent years, some states have taken action to close these gaps so that all workers—regardless of their age—have a right to the minimum wage. All states should follow suit.

Step III: Modernize child labor standards to protect children’s health and wellbeing, safeguard their right to education, and improve their career prospects

The most effective child labor laws implement evidence-based guardrails to prevent excessive and hazardous work—as discussed above—alongside innovative policies to empower youth workers, deter violations, and provide meaningful redress and support to victims if violations occur. State lawmakers need not be bound by traditional areas of policy covered by the FLSA and can also:

1. Require workers’ rights education: If young workers do not know their rights, they will be less likely to report unsafe or illegal working conditions. States can invest in labor education to address this information gap. For example, California mandated that high schools annually teach students about workplace rights and the labor movement following a curriculum developed by the UC Berkeley Labor Center.
2. Mandate employer training on child labor laws and commitment to following the law: For example, Washington requires businesses who hire minors to obtain a special endorsement on their business license affirming compliance with child labor laws.
3. Encourage reporting by protecting whistleblowers and victims: Most labor investigations depend on worker reporting. Because young workers lack experience and knowledge about workplace rights and may fear employer retaliation, loss of wages, or immigration enforcement, many workplace abuses go unreported and uninvestigated. To address these enforcement challenges, state lawmakers should:
   1. Provide multiple avenues for child labor victims to be made whole after they report violations and risk losing their job. In most states, civil penalties for child labor violations are deposited into the state’s General Fund, and minors receive no compensation in the form of damages owed by the employer. Moreover, when a child is injured or killed on the job while employed illegally, they (or their family members in the event of the child’s death) are generally limited to the workers’ compensation system as their sole source of financial compensation. However, several states have enacted or proposed bills to make aggrieved minors eligible for additional compensation in the form of damages; for example, Colorado recently made it possible for minors who are injured while employed under illegal conditions to pursue private legal action and receive monetary damages.
   2. Enact whistleblower and anti-retaliation protections to protect workers who report labor abuses, as recently done in Minnesota.
   3. Remove provisions of state law that may discourage reporting of violations, such as those holding parents criminally responsible for allowing a child to be employed under illegal conditions, as Colorado recently did.
   4. Provide wraparound services to victims of illegal child labor to address root causes of excessive or hazardous work. For example, unaccompanied migrant youth should be provided with legal services, assistance in securing safe and age-appropriate work, and connections to community-based organizations or local government agencies that can provide additional supportive services.
4. Use innovative enforcement strategies to meaningfully hold employers accountable: Civil monetary penalties are a necessary but insufficient deterrent. State lawmakers should take a holistic approach to changing employer behavior and significantly increase the financial and reputational costs associated with breaking the law. They should:
   1. Use “hot goods” provisions and “stop work” orders to immediately disrupt the normal business of employers who are actively violating the law. “Hot goods” provisions allow courts to stop the flow of goods produced using illegal child labor and are currently in place federally. “Stop work” orders allow labor agencies to require the cessation of business until child labor violations are addressed, increasing the cost of violating the law. New Jersey permits such orders to be used when minimum wage violations are occurring.
   2. Bar violators from receiving public funding as proposed in Alabama, and implement other penalties, like revoking an employer’s permission to hire minors when they violate the law, as enacted in Washington.
   3. Create lead corporation accountability, so corporations are held jointly responsible for violations committed by their subcontractors or staffing agencies as proposed in a federal bill.
   4. Make employer violations data more accessible to the public—as recently mandated in Colorado—or publicly shame companies that violate the law by posting about violations on the state labor agency’s website—similar to New Jersey and New York.
   5. You can read more about these and other policies to address and deter violations here: Policies for states and localities to fight oppressive child labor.

Additional recommended resources 

• Child labor state legislation tracker (Economic Policy Institute) 

• Campaign to End US Child Labor 

• Child Labor Coalition at the National Consumers League 

• Federal child labor regulations under the Fair Labor Standards Act  

• State child labor laws (U.S. Department of Labor; note that this page may not reflect all recent state legislative changes) 

• How states can stop the corporate campaign to roll back child labor protections (State Innovation Exchange and Economic Policy Institute) 

Editor’s note: This piece was revised on October 24, 2025, to add an “Additional recommended resources” section. 

{{1.}} Connecticut (32 hours), Florida (30), Kentucky (30), Maine (24), Michigan (24), New Hampshire (30), New York (28), Pennsylvania (28), Washington (20). See https://www.dol.gov/agencies/whd/state/child-labor.

{{2.}} Alabama (10 p.m. to 5 a.m.), Arkansas (11 p.m. to 6 a.m.), California (10 p.m. to 5 a.m.), Connecticut (10 or 11 p.m. to 6 a.m.), Florida (11 p.m. to 6:30 p.m.), Indiana (10 p.m. to 6 a.m.), Kentucky (11 p.m. to 6 a.m.), Louisiana (11 p.m. or 12 a.m. to 5 a.m.), Maine (10:15 a.m. to 7 a.m.), Massachusetts (10 p.m. to 6 a.m.), Michigan (11:30 p.m. to 6 a.m.), Minnesota (11 p.m. to 5 a.m.), New Jersey (11 p.m. to 6 a.m.), New York (10 p.m. to 6 a.m.), North Carolina (11 p.m. to 5 a.m.), Ohio (11 p.m. to 7 a.m.), Pennsylvania (12 a.m. to 6 a.m.), Rhode Island (11:30 p.m. to 6 a.m.), Tennessee (10 p.m. to 6 a.m.), Washington (10 p.m. to 7 a.m.), and D.C. (10 p.m. to 6 a.m.). See https://www.dol.gov/agencies/whd/state/child-labor.

{{3.}} Hazardous occupation (HO) 5. Power-driven woodworking machines; HO 8. Power-driven metal-forming, punching and shearing machines; HO 10. Power-driven meat-processing machines, slaughtering and meat packing plants; HO 12. Balers, compactors, and power-driven paper-products machines; HO 14. Power-driven circular saws, band saws, guillotine shears, chain saws, reciprocating saws, wood chippers, and abrasive cutting discs; HO 16. Roofing operations and work performed on or about a roof; HO 17. Trenching and excavation operations.

Chair Liz Berry, Ranking Member Suzanne Schmidt, Chair Rebecca Saldaña, Ranking Member Curtis King and members of the committee,

Thank you for the opportunity to speak with you today. My name is Sebastian Martinez Hickey, I am an economic analyst at the Economic Policy Institute (EPI). EPI is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals.

I am testifying in support of HB 1764/ SB 5578, which will gradually increase the minimum wage to $25 per hour by 2031, establish minimum standards for vacation leave, provide bereavement leave, and bolster wage enforcement. Increasing the minimum wage will raise earnings for more than a million Washington workers. For years, Washington has been a national leader in minimum wage policy. It has the highest state minimum wage in the nation and the city with the highest minimum wage. It is also the first state to index its minimum wage to inflation, a commonsense approach that has been adopted by 20 other states and Washington, D.C.{{1}} But despite these steps, Washington’s minimum wage still doesn’t provide enough economic security for hundreds of thousands of low-wage workers and their families.

EPI’s Family Budget Calculator (FBC) measures the income individuals and families of different sizes need to attain a modest yet adequate standard of living for every county and metro area in the country.{{2}} Workers living throughout Washington state face high costs to cover basic needs such as housing, health care, and food. There are eight counties, encompassing 69% of the state’s population, where a single adult must cover more than $52,000 a year to make ends meet, two of which (Snohomish and King counties) require annual expenses of upwards of $68,000.{{3}}

From these budget costs we can estimate a living wage standard that would allow families to make ends meet. One conservative approach would be to calculate an hourly wage that covers the basic needs of a single adult, while also assuming that around one-fifth of their expenses will be covered by income other than wages.{{4}} This “other income” could include employer-provided health insurance, or government social insurance and benefits, for instance. Even under these conservative assumptions, an adequate living wage in King County would come out to around $27.41 an hour today.

Several municipalities in Washington have increased their minimum wage above the state level.{{5}} HB 1764 would likely supersede some of these city minimum wages by 2031, including in Seattle. It is still important for lawmakers to periodically reassess the adequacy of the local minimum wages and higher levels might still be appropriate for expensive regions in the state.

Increasing the state wage floor will be particularly beneficial for families with children. Households with children face significantly higher living costs due to child care and increased food and health care needs. In Spokane County, a two-adult, two-child household must cover more than $107,307 a year to make ends meet, which comes out to $25.79 an hour if both adults are working full time, and all income comes from wages. Families of this size face similar or greater costs across much of the state including in Douglas ($26.45 per hour), Kittitas ($25.85), and Benton ($25.36) counties.{{6}}

Our analysis of the proposed legislation finds that by the end of 2031, HB1764/SB 5578 would lift wages for more than a million Washingtonian workers, or 31% of the wage-earning workforce in the state. In total, workers would gain more than $3 billion in additional wages.{{7}} For a full-time, year-round worker affected by the increases, this translates to $2,860 a year in higher earnings.

Our analysis also shows the equity impacts of this proposal. Almost 60% of the affected workers are women. The increase also disproportionately affects Black, Hispanic, and multiracial and American Indian and Alaska Native workers. More than 311,000 parents will get a raise, and 564,500 children live in households affected by the proposed increase.

These wage increases for low-wage workers will not come at the expense of high unemployment or other negative economic shocks. The majority of and highest-quality minimum wage studies find little to no employment loss from minimum wage increases.{{8}} These findings are consistent even at the highest minimum wage levels that have been studied. Most recently, a study of the recent $20 fast food minimum wage in California showed that the policy increased wages for workers, but did not lead to decreased unemployment or business closure in the industry.{{9}}

Minimum wage increases avoid significant economic costs because businesses are able to adjust to the increase in labor costs.{{10}} Most low-wage jobs have extremely high turnover rates, but when workers are paid more, they tend to stay at their current jobs longer. This cuts down on the time workers spend between jobs without getting paid and means businesses are spending less money on recruitment and training. Workers also might become more productive, both because of working in the same role longer and because of valuing their job more.

Employers also react to minimum wage increases by passing some of their cost increases on to consumers although research shows that the resulting price increases tend to be very small.{{11}} Workers also move from less productive firms to more productive ones that are hiring after the increases.

In addition to strengthening the wage floor, HB 1764 / SB 5578 would make further steps to create a fairer economy by establishing a 15-day minimum for vacation accumulation and 5 days of bereavement leave. One in four U.S. workers have no access to vacation and the level of access varies greatly by wage level.{{12}} Workers in the bottom 10^th of the wage distribution are half as likely as the top 10% to receive vacation days.

Finally, this bill would further empower regulators to treat wage theft in proportion to the impact it has on workers, especially those earning lower wages. The bill enables regulators to issue stop-work orders to businesses found in violation of wage regulations. In 2023, Washington recovered $5.5 million in wages from employer violations, but this is likely only a small share of total infractions.{{13}} Stronger enforcement is needed so that Washington workers are fully paid the wages they are owed.

HB 1764 / SB 5578 is a key step towards creating an economy where all workers in Washington can achieve a decent standard of living and have access to benefits and strong workplace protections. Collectively these policies will contribute to a stronger and more resilient state economy.

Notes

{{1.}} Economic Policy Institute, Minimum Wage Tracker. Last updated January 1, 2025.

{{2.}} Economic Policy Institute, Family Budget Calculator. Last updated January 15, 2025.

{{3.}} The eight counties are King, Snohomish, Clark, Kitsap, Pierce, Whatcom, Thurston, and San Juan counties. Population data from United States Census Bureau, Annual Estimates of the Resident Population: April 1, 2020 to July 1, 2023, Population Division, May 2024.

{{4.}} Elise Gould, Zane Mokhiber, and Katherine DeCourcy, What Constitutes a Living Wage? A Guide to Using EPI’s Family Budget Calculator, Economic Policy Institute, January 2024.

{{5.}} Bellingham, Burien, King County, Renton, Seattle, SeaTac, Tacoma, and Tukwila. EPI Minimum Wage Tracker, 2025.

{{6.}} In Ferry County (the lowest-cost county in the state according to the FBC) a single adult with one child must cover more than $65,100 a year to make ends meet. For a two-adult, two-children household where both adults work full time, the living wage is $22.71.

{{7.}} David Cooper, Zane Mokhiber, and Ben Zipperer, Minimum Wage Simulation Model technical methodology, Economic Policy Institute, February 2019.

{{8.}} Arindrajit Dube and Ben Zipperer, “Own-Wage Elasticity: Quantifying the Impact of Minimum Wages on Employment,” National Bureau of Economic Research Working Paper no. 32925, September 2024.

{{9.}} Michael Reich and Denis Sosinskiy, “Sectoral Wage-Setting in California,” Institute for Research on Labor and Employment Working Paper no. 104-24, September 2024.

{{10.}} Ben Zipperer, “Turnover, Prices, and Reallocation: Why Minimum Wages Raise the Incomes of Low-Wage Workers.” Journal of Law and Political Economy 3, no. 1 (2022): 160–171.

{{11.}} Ben Zipperer, “Turnover, Prices, and Reallocation: Why Minimum Wages Raise the Incomes of Low-Wage Workers.” Journal of Law and Political Economy 3, no. 1 (2022): 160–171.

{{12.}} Elise Gould, “Millions of Working People Don’t Get Paid Time Off for Holidays or Vacation,” Economic Policy Institute, September 2015.

{{13.}} Margaret Poydock and Jiayi Zhang, More than $1.5 billion in stolen wages recovered for workers between 2021 and 2023, Economic Policy Institute, December 2024.