President Biden issued an executive order Tuesday requiring federal contractors to pay a $15 minimum wage to hundreds of thousands of workers on federal contracts.
In a fact sheet, the White House said those workers are critical to the functioning of the federal government. They include cleaning professionals and maintenance workers whom the administration said ensure federal employees have safe and clean places to work.
They also include nursing assistants who care for the nation’s veterans, cafeteria and other food service workers who ensure military members have healthy and nutritious food to eat and laborers who build and repair federal infrastructure.
Under Biden’s executive order, wages will increase beginning Jan. 30, 2022.
Biden has directed all agencies to incorporate the $15 minimum wage in new contract solicitations, and by March 30, 2022, all would 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,” Biden’s order noted.
They must 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.
The order also will:
• Eliminate the tipped minimum wage for federal contractors by 2024. The federal statute allows employers of tipped workers to pay a sub-minimum salary as long as their tips bring their compensation up to the minimum wage level. The Obama-Biden executive order raised the wages for tipped workers but didn’t wholly phase out the subminimum wage for these workers. This executive order finishes that work and ensures that 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.”
The administration said the order would build on the Obama-Biden Executive Order 13658, issued in February 2014, requiring federal contractors to pay employees working on federal contracts $10.10 per hour, subsequently indexed to inflation.
The minimum wage for workers performing work on covered federal contracts currently stands at $10.95 per hour, and the tipped minimum wage is $7.65 per hour.
“This executive order will promote economy and efficiency in federal contracting, providing value for taxpayers by enhancing worker productivity and generating higher-quality work by boosting workers’ health, morale, and effort,” White House officials stated in the fact sheet released Tuesday. “It will reduce turnover, allowing employers to retain top talent and lower the costs associated with recruitment and training. It will reduce absenteeism, a change that has been linked to higher productivity, not just by the employees who are more present, but by their co-workers, too.”