Federal Contractors Will Soon Be Required to Pay a $15 Hourly Minimum Wage

President Biden has signed an Executive Order that will require all federal agencies to incorporate a $15 minimum wage into new contract solicitations by January 2022 and into newly signed contracts by March 2022.  Pursuant to the White House statement on the topic, part of the motive for the new Executive Order is due to “impacts beyond federal contracting, as competitors in the same labor markets as federal contractors may increase wages, too, as they seek to compete for workers.”  President Biden also anticipates that “employers may seek to raise wages for workers earning above $15 as they try to recruit and retain talent.”  The Executive Order will also index the federal contractor minimum wage to inflation, as well as eliminate the sub-minimum wage for tipped federal contractor employees.

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Article by Iwana Rademaekers, Of Counsel
Labor & Employment Practice Area
Sprouse Shrader Smith PLLC