Biden Orders $15 per hour for Federal Contract Workers

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Photo by Evan Vucci AP
Photo by Evan Vucci AP

President Joe Biden issued an executive order on April 27 increasing the minimum wage for federal contract workers to $15 per hour.

The current minimum for the federal government's contract workers is a mere $10.95.

Biden's order also eliminates the discount for tipped workers by 2024. They are now guaranteed only $7.65 per hour, on the theory that their tips will bring them up to $10.95 per hour.

Federal contract workers with disabilities will also receive a minimum of $15 per hour.

Federal agencies are instructed to incorporate the $15 minimum wage in new contract solicitations starting January 30 and to implement the wage threshold in new contracts by March 30.

Agencies must implement the higher wage in existing contracts when they are extended, which often happens annually.

The wage will be adjusted yearly based on the increase in inflation.

Biden's order will provide a big pay hike to a wide range of workers who are not direct employees of the federal government, but employees of companies that provide services at federal facilities and projects.

Among those getting a raise will be cleaning professionals and maintenance workers, nursing assistants who care for veterans, cafeteria and other food service workers, and laborers who build and repair federal infrastructure.

According to the White House, Biden's executive order will not lead to reduced employment or hurt the businesses that hire federal contractors and will not result in increased costs for taxpayers.

The wage increase will enhance worker productivity and generate higher-quality work by boosting workers' health, morale, and effort, the White House said, and will lower turnover, absenteeism, and supervisory costs.

The pay raise also will help reduce decades of income inequality and improve families' economic security, particularly for women and people of color, according to a fact sheet distributed by the administration.

Biden had hoped to include an across-the-board $15 minimum wage in his COVID relief package but was stymied when the US Senate parliamentarian ruled that the provision could not be passed by reconciliation. That meant the president's bill would have to win the approval of 11 Senate Republicans — an impossible task.

Seattle and other Washington cities have passed local $15 per hour ordinances, and the state minimum wage now stands at $13.69 per hour.