Minimum Wage Raises For Federal Contractors

President Biden Raises Minimum Wage To $15 For Federal Contractors

minimum wage increase

President Biden signed an Executive Order on April 28th that will increase the minimum wage for federal contractors to $15 an hour. The minimum wage for federal contractors is currently $10.95, which has been in place since 2014 under President Obama. President Biden’s Executive Order also mandates that the minimum wage rises with inflation and cost of living.

The White House stated that the new minimum wage likely will provide hundreds of thousands of federal contractors with increased pay. The White House also stated that they believe increasing the minimum wage will not lead to significant job losses or increased taxes.

Even though it is a small percentage of the population getting a minimum wage increase, the administration believes that the Executive Order will likely increase the minimum wage in other areas by forcing employers to increase pay to keep workers or hire new ones.

Around 5 million people work on federal contracts, but most get paid over the minimum wage. The ones who get paid less than $15 an hour will see the direct benefit of this Executive Order when it takes effect in 2022.

Tipped Minimum Wage Eliminated for Federal Contractors

President Biden’s Executive Order also eliminates the “tipped minimum wage” for federal contractors. Currently, employers can pay tipped workers $7.65 an hour as long as they receive enough tips to put them above the minimum wage.

The house of Representatives has been trying to increase the federal minimum wage to $15 an hour for years but has not been able to get the Bill past the senate. President Biden also tried to increase the federal minimum wage by incorporating it into his pandemic relief package, but it was taken out by the senate.

What is a Federal Contractor?

Federal contractors are individuals or employers who enter into a contract with the United States (any department or agency) to perform a specific job, supply labor and materials, or for the sale of products and services”. A federal contractor can be anyone from a security guard to janitorial staff, IT staff, and more. 

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