President Biden has issued an executive order requiring federal contractors to pay a $15 minimum wage to hundreds of thousands of workers who are working on federal contracts.
This executive order will:
- Increase the hourly minimum wage for federal contractors to $15. Starting January 30, 2022 all agencies will need to incorporate a $15 minimum wage in new contract solicitations, and by March 30, 2022, all agencies will need to implement the minimum wage into new contracts. Agencies must also implement the higher wage into existing contracts when the parties exercise their option to extend such contracts, which often occurs annually.
- Continue to index the minimum wage to an inflation measure so that every year after 2022 it will be automatically adjusted to reflect changes in the cost of living.
- Eliminate the tipped minimum wage for federal contractors by 2024. Federal statute allows employers of tipped workers to pay a sub-minimum wage as long as their tips bring their wage up to the level of the minimum wage. The Obama-Biden executive order raised the wages for tipped workers, but didn’t completely phaseout the sub-minimum wage for these workers. This executive order finishes that work and ensures tipped employees working on federal contracts will earn the same minimum wage as other employees on federal contracts.
- Ensure a $15 minimum wage for federal contract workers with disabilities. To ensure equity, similar to the Obama-Biden minimum wage executive order for federal contractors, this executive order extends the required $15 minimum wage to federal contract workers with disabilities.
- Restore minimum wage protections to outfitters and guides operating on federal lands by revoking President Trump’s executive order 13838 “Exemption From Executive Order 13658 for Recreational Services on Federal Lands.”
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