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Biden Increases Minimum Wage to $15 for Federal Contractors

The executive order will mean raises for millions working on federal contracts

Brian Young's picture
Apr 27, 2021

After failing to raise the federal minimum wage, President Biden is making good on his promise to help raise wages for workers by issuing an executive order raising the minimum wage for federal workers to $15 an hour.

The order, which Biden signed on Tuesday, would mean raises for hundreds of thousands of workers who work on federal contracts. The raises will begin taking effect in January of 2022 and all workers will be making $15 an hour by March of 2022. This one-year timeline was needed since it is almost impossible to reopen federal contracts outside of the annual review period.

Currently, federal contract workers make $10.95 after President Obama raised it in 2014 and allowed for automatic increases to keep up with inflation. The new minimum wage will also continue to adjust for inflation guaranteeing workers raises every year going forward.

Biden’s Executive Order would also eliminate the tipped minimum wage for federal contract workers. During the Obama administration, President Obama’s Executive order raised the tipped minimum wage and now Biden is finishing the job by eliminating this provision that allows contractors to pay workers less than the minimum wage if their tips are large enough to bring their hourly rate over the minimum wage. The current tipped minimum wage for federal contract workers is $7.65 an hour. His Executive Order also would eliminate a sub-minimum wage for disabled federal contract workers and would 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.”

In a fact sheet from the White House, the Biden administration claims that a higher minimum wage will reduce absenteeism, increase productivity, and reduce supervisory costs. They also said that this increase will “ensure that hundreds of thousands of workers no longer have to work full time and still live in poverty.”

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