The "Living Wage for Musicians Act of 2025" seeks to establish a dedicated mechanism for compensating musical artists directly. This legislation creates the Artist Compensation Royalty Fund, which will be managed by a designated eligible non-profit entity. The Register of Copyrights, with the approval of the Librarian of Congress, is responsible for selecting this administrator, ensuring it has the necessary capabilities and artist representation on its board.

The fund will be financed through contributions from "service providers," primarily music streaming platforms. These providers must charge subscribers a new living wage royalty fee, an additional charge between $4 and $10, representing 50% of the subscription fee. Additionally, service providers are required to contribute 10% of their non-subscription revenue, such as advertising income, to the fund, with these amounts clearly itemized and not included in content cost calculations.

Amounts collected in the fund will be distributed quarterly to eligible artists. Ninety percent of the funds are allocated to eligible featured artists, with payments proportional to their share of "qualifying streams" up to a specified limit. The remaining ten percent is designated for eligible non-featured artists, distributed through the American Federation of Musicians and Screen Actors Guild and the American Federation of Television and Radio Artists Intellectual Property Rights Distribution Fund. The Fund Administrator is also empowered to establish regulations, require detailed records from service providers, conduct audits, and impose penalties for non-compliance.