Biden to Raise Minimum Wage of Federal Contractors

President Biden is issuing an Executive Order to raise the minimum wage for federal contractors to $15 per hour.

President Biden has issued an Executive Order on Tuesday requiring federal contractors to pay their employees a minimum wage of $15 per hour.

A statement from the White House describes the new Executive Order as follows:

  • 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 subminimum 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.”

Federal contact workers currently earn a minimum wage of $10.95 per hour and a tipped minimum wage of $7.65 per hour.

The White House said in the statement that Tuesday’s Executive Order “will build on the Obama-Biden Executive Order 13658, issued in February 2014, requiring federal contractors to pay employees working on with federal contracts $10.10 per hour, subsequently indexed to inflation.”

A copy of the Executive Order is included below.

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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