President Joe Biden signed an executive order Tuesday requiring federal agencies to pay contract workers a minimum wage of $15 per hour. The order will affect hundreds of thousands of contractors, and comes weeks after Biden and Democrats in Congress attempted to raise the national hourly minimum wage to $15 as part of the American Rescue Plan. “
The White House said in a statement: “These workers are critical to the functioning of the federal government. This executive order will promote economy and efficiency in federal contracting … by enhancing worker productivity and generating higher-quality work by boosting workers’ health, morale and effort. It will reduce turnover, allowing employers to retain top talent and lower the costs associated with recruitment and training.”
Under the order, all federal agencies must pay contractors at least $15 per hour in new contracts by next April. The current minimum wage for federal contractors is $10.95 per hour and the tipped minimum wage is $7.65 per hour. The new executive order will also eliminate the tipped minimum wage for contractors by 2024; automatically adjust the minimum wage yearly due to rises in inflation, beginning in 2022; ensure a $15 minimum wage for federal contract workers with disabilities; and restore minimum wage protections to outfitters and guides on federal lands by revoking an order from former President Donald Trump.
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