The Department of Labor has announced a final rule that implements President Biden’s executive order to increase the hourly minimum wage to $15 for employees on federal contracts beginning Jan. 30, 2022.

                By                    Yaёl Bizouati-Kennedy

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Biden had signed the order on April 27, 2021 to raise the minimum wage from $10.95 to $15 for federal contractors. The tipped minimum wage is $7.65 per hour, which will be eliminated for federal contract employees by 2024. The rule applies in all 50 states, the District of Columbia and specified U.S. territories.

“The workers helped by Executive Order 14026 and today’s final rule do essential work on our nation’s behalf,” U.S. Secretary of Labor Marty Walsh said in a statement. “They build and repair the federal infrastructure, clean and maintain our national parks, monuments and other federal facilities, care for our veterans, and ensure federal workers and military service members are provided with safe and nutritious food. Implementing this Executive Order improves the economic security of these workers and their families, many of whom are women and people of color.”

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Starting January 30, 2022, all agencies will need to incorporate a $15 minimum wage in new contract solicitations. By March 30, 2022, all agencies will need to implement the minimum wage into new contracts. Agencies must also implement the higher wage into existing contracts when the parties exercise their option to extend such contracts, which often occurs annually.

“In order to attract and retain good talented workers, it is important that employers are able to stay competitive within the market,” Kumar added. “I see this as an opportunity to provide workers with the economic security of higher wages by taking care of their well-being and by getting employers more involved in the conversation of providing a living wage that will keep up with the basic standard of living. A higher wage will improve productivity and also help reduce turnover. This, in turn, provides an employer with better workers who are committed to their jobs and brings greater value to employers and employees alike.”

In addition, the order requires that the minimum wage continue to be indexed to an inflation measure so that every year after 2022 it automatically adjusts to reflect changes in the cost of living, the Labor Department said.

In addition, the rule will ensure a $15 minimum wage for workers with disabilities performing work on or in connection with covered contracts, as well as restore minimum wage protections to outfitters and guides operating on federal lands.

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