The Biden Administration issued an Executive Order (EO) affecting the federal contractor minimum wage. As a result, federal contractors will pay a $15 minimum wage to any federal contract worker. Furthermore, the latest EO joins a slew of other similar orders issued by the administration. For example, in January 2021, an EO expanded Title IX LGBTQ discrimination prohibitions. Similarly, in January, an EO overturned the training prohibitions previously issued under Executive Order 13950.
Contents of the Executive Order
Released on April 27th, 2021, the new EO will:
- Increase the hourly federal contractor minimum wage to $15. Starting January 30th, 2022, all agencies will need to incorporate a $15 minimum wage in new contract solicitations. In addition, by March 30th, 2022, all agencies will need to implement the minimum wage into new contracts. Meanwhile, agencies must implement the higher wage into existing agreements when they exercise their option to extend such contracts.
- Continue to index the minimum wage to an inflation measure. Therefore, after 2022, it will be automatically adjusted to reflect changes to the cost of living.
- Eliminate the tipped federal contractor minimum wage by 2024. Currently, the federal statute allows tipped worker employers to pay a sub-minimum wage. However, employers can only pay this wage if tips bring their wage up to the minimum wage level. An earlier Obama-Biden release, EO 13658, raised tipped worker wages but didn’t wholly phase out the subminimum wage for workers. This latest EO ensures tipped employees on federal contracts will earn the same minimum wage as others on federal contracts.
- Ensure a $15 minimum wage for federal workers with disabilities. To ensure equity, the EO extends the required $15 minimum wage to federal contract workers with disabilities.
- Restore minimum wage protections to outfitters and guides operating on federal lands. Finally, the EO revokes President Donald J. Trump’s EO 13838, “Exemption From Executive Order 13658 for Recreational Services on Federal Lands.” In EO 13838, outfitters and guides in federal parks no longer could receive the federal contractor minimum wage. The change was due, in part, to the belief that the minimum wage would raise overall park tour costs.