The U.S. Department of Labor today announced a final rule that will increase the minimum wage for employees on federal contracts to $15/hour, starting January 30 of next year. This rule, which will affect most new contracts, renewals, and extensions of existing contracts, implements an executive order that President Biden signed last April.
The change is expected to increase the wages of more than 300,000 workers.
Here are the details:
- The minimum wage for workers on federal contracts will be $15/hour starting January 30, 2022.
- In future, the federal contract minimum wage will be indexed to inflation.
- The tipped minimum wage for federal contract employees will be eliminated by 2024.
- Workers will disabilities who work on covered contracts will also be guaranteed the $15 minimum (currently, workers with disabilities can be paid less than minimum wage in some circumstances).
- Minimum wage protections are restored to outfitters and guides operating on federal lands.
“In addition to promoting efficiency in federal contracting, the implementation of Executive Order 14026 has other benefits,” said Wage and Hour Division Acting Administrator Jessica Looman. “The final rule adds value for taxpayers by boosting worker productivity and reducing employee turnover and absenteeism. It also allows federal contractors to retain top talent, and reduce recruiting and training costs.”