Biden intends on raising minimum wage to $15 for federal contractors

Biden says this latest action will not cost the taxpayer more

WASHINGTON (KLKN)- Early Tuesday morning, the Biden-Harris Administration released a fact sheet breaking down their latest executive action.

The executive order the President is issuing requires federal contractors to pay a $15 minimum wage to hundreds of thousands of workers across the country who are working on federal contracts.

According to the fact sheet, “These workers are critical to the functioning of the federal government: from cleaning professionals and maintenance workers who ensure federal employees have safe and clean places to work, to nursing assistants who care for the nation’s veterans, to cafeteria and other food service workers who ensure military members have healthy and nutritious food to eat, to laborers who build and repair federal infrastructure.”

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This order will accomplish the following:

  • Federal contractor’s hourly minimum wage will be increased 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.“The 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 phase out 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’.”

Right now, the minimum wage for federal contract workers is $10.95/hour.

President Biden says the higher minimum wage will not cost the taxpayer more. A White House official said that Biden’s Council of Economic Advisors have reviewed the order and didn’t find taht requiring higher wage would lead to any job loss.

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