President Biden issued an executive order on April 27 raising to $15 the minimum wage for work done on federal contracts. The wage currently is $10.95.
The wage “ensures that hundreds of thousands of workers no longer have to work full time and still live in poverty,” according to a White House Fact Sheet on the executive order. “In addition to directly lifting the wages of hundreds of thousands of contract workers, the executive order will have impacts beyond federal contracting, as competitors in the same labor markets as federal contractors may increase wages, too, as they seek to compete for workers.”
Federal agencies will need to incorporate the $15 minimum wage in new contract solicitations beginning Jan. 30, 2022, and implement the minimum wage into new contracts by March 30, 2022. Agencies must also implement the higher wage into existing contracts when the parties exercise their option to extend such contracts. The wage will be subject to annual increases indexed to inflation beginning Jan. 1, 2023.
The order extends the minimum wage to workers with disabilities, who are often paid less than their abled counterparts.
The minimum wage for tipped workers will increase to $10.50 per hour from $7.65 per hour currently and by 2024 will be eliminated entirely.