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-UNOFFICIAL COPY  26 RS BR 329
-Page 1 of 2
-XXXX   11/20/2025 9:44 AM  Jacketed
-AN ACT relating to wages. 1
-Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
-Section 1.   KRS 337.275 is amended to read as follows: 3
-(1) (a) Except as may otherwise be provided by this chapter, every employer shall 4
-pay to each of his or her employees wages at a rate of not less than: 5
-1. Nine dollars and fifty cents ($9.50) an hour beginning  on the effective 6
-date of this Act; 7
-2. Eleven dollars ($11) an hour beginning on July 1, 2027; 8
-3. Twelve dollars and fifty cents ($12.50) an hour beginning on July 1, 9
-2028; 10
-4. Fourteen dollars ($14) an hour beginning on July 1, 2029; and 11
-5. Fifteen dollars ($15) an hour beginning on July 1, 2030 [five dollars 12
-and eighty-five cents ($5.85) an hour beginning on June 26, 2007, not 13
-less than six dollars and fifty -five cents ($6.55) an hour beginning July 14
-1, 2008, and not less than seven dollars and twenty -five cents ($7.25) an 15
-hour beginning July 1, 2009].  16
-(b) If the federal minimum hourly wage as prescribed by 29 U.S.C. sec. 206(a)(1) 17
-is increased in excess of the minimum hourly wage in effect under this 18
-subsection, the minimum hourly wage under this subsection shall be increased 19
-to the same amount, effective on the same date as the federal minimum hourly 20
-wage rate. If the state minimum hourly wage is increased to the federal 21
-minimum hourly wage, it shall i nclude only the federal minimum hourly rate 22
-prescribed in 29 U.S.C. sec. 206(a)(1) and shall not include other wage rates 23
-or conditions, exclusions, or exceptions to the federal minimum hourly wage 24
-rate. In addition, the increase to the federal minimum hou rly wage rate does 25
-not extend or modify the scope or coverage of the minimum wage rate 26
-required under this chapter. 27
-UNOFFICIAL COPY  26 RS BR 329
-Page 2 of 2
-XXXX   11/20/2025 9:44 AM  Jacketed
-(2) (a) Notwithstanding the provisions of subsection (1) of this section, for any 1
-employee engaged in an occupation in which he or she  customarily and 2
-regularly receives more than thirty dollars ($30) per month in tips from 3
-patrons or others, the employer may pay as a minimum not less than five 4
-dollars ($5) an hour beginning on the effective date of this Act. 5
-(b) If[ the hourly wage rate requi red to be paid a tipped employee under]  the 6
-federal minimum hourly wage [ law]  as prescribed by 29 U.S.C. sec. 203 is 7
-increased in excess of the minimum hourly wage in effect under this 8
-subsection, the minimum hourly wage under this subsection shall be 9
-increased to the same amount, effective on the same date as the federal 10
-minimum hourly wage rate. 11
-(c) The employer shall establish by his or her records that for each week where 12
-credit is taken, when adding tips received to wages paid, not less than the 13
-minimum rate prescribed in subsection (1) of this section[29 U.S.C. sec. 203] 14
-was received by the employee. No employer shall use all or part of any tips or 15
-gratuities received by employees toward the payment of the statutory 16
-minimum hourly wage as required by subsection (1) of this section[29 U.S.C. 17
-sec. 203]. Nothing, however, shall prevent employees from entering into an 18
-agreement to divide tips or gratuities among themselves. 19
+Page 1
+Local Government Mandate Statement
+Kentucky Legislative Research Commission
+2026 Regular Session
+
+Part I:  Measure Information
+
+Bill Request #: 329 Bill #: HB 270
+Document ID #: 1641 Sponsor: Rep. Daniel Grossberg
+Bill Title: AN ACT relating to wages
+
+Unit of ☒ City ☒ County ☒ Urban-County
+Government: ☒ Charter County ☒ Consolidated Local ☒ Unified Local
+
+Office(s) Impacted: All who employ persons earning minimum wage or receive
+occupational license taxes
+
+Requirement: ☒ Mandatory ☐ Optional
+
+Effect on Powers
+& Duties:
+
+☒ Modifies Existing ☐ Adds New ☐ Eliminates Existing
+
+Other Fiscal Statement(s)
+that may exist:
+☐ Actuarial Analysis ☐ Corrections Impact
+☐ Health Benefit Mandate ☐ State Employee Health Plan
+
+Part II:  Bill Provisions and the Estimated Fiscal Impact Relating to Local Government
+
+HB 270 would increase the required minimum wage payable to employees to $9.50 per
+hour on the effective date of the Act. It would then increase annually on July 1 of each
+subsequent year through 2030, rising to $11 per hour on July 1, 2027, $12.50 per hour on
+July 1, 2028, $14 per hour on July 1, 2029, and ultimately reach $15 per hour on July 1,
+2030.
+
+Additionally, HB 270 would require employers to pay tipped workers at least $5 per hour
+unless federal law mandates a higher minimum, in which case the higher federal rate
+would apply.
+
+HB 270 could have a positive fiscal impact on cities and counties that impose an
+occupational license tax on workers in their jurisdiction. HB 270 could have a
+negative fiscal impact on cities and counties that do not levy occupational license
+tax, since their payroll costs from paying employees a higher minimum wage could
+increase and not be offset by increased revenues from occupational license taxes.
+
+Page 2
+Under KRS 68.197, counties with populations of 30,000 or more may impose an
+occupational license tax of up to 1%. In general, KRS 68.197 requires that occupational
+license taxes paid to cities be credited against the county occupational license tax
+imposed under that statute.
+
+Under KRS 68.180, counties with populations of 300,000 or more may increase the
+occupational license tax up to 1.25%. Other city taxpayers in counties with populations
+greater than 300,000 may receive a tax credit if both the city and county contribute to
+certain joint agencies.
+
+As of 2025, the Kentucky Association of Counties reported that 87 Kentucky counties
+currently impose an occupational license fee on workers in their county. Counties without
+an occupational license fee would not benefit from increased revenue from HB 270 but
+could have increased wage expenses for their minimum wage employees.
+
+Counties with a population under 30,000 that impose occupational license taxes may
+have more significant financial benefits under HB 270 because they are not subject to
+limits on the occupational license tax rate and are not required to offset city occupational
+license taxes.
+
+According to a 2023 publication from the Kentucky League of Cities (KLC),
+approximately 173 Kentucky cities imposed an occupational license tax in FY 2023. Like
+counties, cities that impose occupational license taxes would benefit from increased tax
+revenues due to higher wages, while those without such taxes would not see increased
+revenue but may face higher payroll expenses. Additionally, because cities are not
+required to offset county occupational license taxes and are not subject to the limitations
+on rates, they may experience a greater financial impact from these tax revenues.
+
+Approximately 14,000 of Kentucky’s 1.1 million hourly workers currently make at or
+below the federal minimum wage of $7.25 per hour, according to the most recent 2023
+data from the U.S. Bureau of Labor Statistics (BLS). This figure includes 2,000 workers
+earning exactly minimum wage and an additional 12,000 earning below that threshold. It
+is unknown how many of these workers in Kentucky are employed by local governments.
+
+Data Source(s): Kentucky League of Cities; Office of the Kentucky Secretary of State;
+Kentucky Association of Counties; LRC staff; U.S. Bureau of Labor
+Statistics
+
+Preparer: HT Reviewer: MS (MDA) Date: 12/15/25