WASHINGTON — President Joe Biden plans to sign an executive order Tuesday that will raise federal contractors’ minimum wage to $15 an hour, the White House announced in a news release.
According to the release, the increase, which applies “to hundreds of thousands of workers who are working on federal contracts,” will raise the minimum hourly wage from $10.95 to $15. The order will require all federal agencies to incorporate the $15 wage in new contract solicitations beginning Jan. 30. By March 30, agencies also must implement the higher wage into new contracts, the release said.
In addition, the executive order will increase the minimum wage of tipped employees on federal contracts from $7.65 to $15 an hour by 2024, the White House said.
“Federal statute allows employers of tipped workers to pay a subminimum 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 phaseout the subminimum wage for these workers,” the release said, referring to a previous executive order issued during former President Barack Obama’s administration. “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.”
The wage increase, which will be adjusted for inflation annually after 2022, also applies to federal contractors with disabilities, according to the release.
As of early Tuesday, Republican officials had not yet commented on the announcement.