H.R. 2 would amend the Fair Labor Standards Act (FLSA) to increase the federal minimum wage in three steps from $5.15 per hour to $7.25 per hour. The act also would apply the minimum wage provisions of the FLSA to the Commonwealth of the Northern Mariana Islands (CNMI). The Congressional Budget Office (CBO) estimates that enacting H.R. 2 would have no significant effect on the direct spending and revenues of the federal government. Because a very small number of federal employees are paid the federal minimum wage, the act would have a minor effect on the budgets of federal agencies that are controlled through annual appropriations. The act would impose mandates, as defined by the Unfunded Mandates Reform Act (UMRA), on some state and local governments, Indian tribes, and private-sector employers because it would require them to pay higher wages than they are required to pay under current law. The act also would preempt the minimum wage laws of the CNMI. CBO estimates that the costs to state, local, and tribal governments and to the private sector would exceed the thresholds established by UMRA.