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WH raises minimum wage for fed contractors

The White House, in a new Executive Order, acted this week to ensure that federal contractors pay workers a minimum wage of $15 per hour.

The move comes on the heels of a similar EO, issued January 22, aimed at federal employees, exclusively—mandating agencies begin a process resulting in the same wage floor.

Prior to this week’s order, the federal contractor minimum wage remained pegged at a much lower rate: $10.95 per hour.

“This order promotes economy and efficiency in Federal procurement by increasing the hourly minimum wage paid by the parties that contract with the Federal Government to $15.00 for those workers working on or in connection with a Federal Government contract as described in section 8 of this order,” the EO states.

The order goes on to list the advantages—to feds, agency mission efficiency, and to the wider society: “Raising the minimum wage enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.”

The new order is to take effect immediately, with the raised minimum wage to be included in new contracts by Jan. 30, 2022—and for this minimum amount to be adjusted annually by the Secretary of Labor in keeping with the Consumer Price Index for Urban Wage Earners and Clerical Workers. This should protect fed contractors against any severe loss of purchasing power due to inflation.

Also under the EO, tipped federal contractors next year will see a significant if not equal boost in their minimum wage, to $10.50 per hour, up from the current $7.65. By 2024, tipped workers’ minimum wage must be adjusted to match that of all other federal contractors.

The Biden White House is on the record as favoring a $15 per hour minimum wage across the economy, in the private sector and all other employers. The president has clarified in public statements that he would be willing to see that number achieved, as seen to some degree in the EOs applying to federal and federal contractor pay, by way of incremental increases. In a current White House-backed bill in Congress, Senate Bill 15, the national minimum wage would have to reach $15 by 2025.

 

Reader comments

Fri, Apr 30, 2021

So now contractors will be paid more than some federal employees. Nice. How about forcing agencies to pay the same across the board for the same jobs? How about standardizing jobs across the federal government so agencies cannot call it something different just to pay less?

Thu, Apr 29, 2021 Juju

Ruling through Executive Orders is only done by tyrannts - per Joe prior to issuing dozens of EOs in four months....

Wed, Apr 28, 2021

If you correct for inflation, this new 15 bucks an hour is really just barely enough to eat. Compare it with early 70s and do the inflation calculation.

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