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RAISING WAGES FOR FEDERAL CONTRACT WORKERS

Filed in
Wage and Hour Issues
• By: Jessica Looman • January 24, 2022

Progress and the well-being of working families requires an economy that works
for everyone.

The Minimum Wage Executive Order signed by President Biden on April 27, 2021 and
the implementing regulations adopted by the Department of Labor’s Wage and Hour
Division ensure that workers on federal contracts receive a fair wage and
demonstrate that government can lead by example.

Starting Jan. 30, 2022, we’re raising the minimum wage for federal contract
workers to $15.00 per hour. This raise, affecting more than 300,000 workers,
comes at a time of historic federal investment in our nation’s infrastructure
that will create millions of new jobs in construction and related industries.

And while the $15 minimum wage will apply to construction workers, it will also
apply to child care, health care, and building and other services workers
employed on federal contracts. About 54% of the workers impacted by this minimum
wage increase are women, and about 25% are workers of color. All of the workers
who benefit from our minimum wage final rule will get an average raise of $5,228
per year.

Raising the minimum wage improves the economic security of families, reduces
poverty and makes progress toward reversing decades of income inequality. Added
benefits can also include better government services, higher morale and
productivity, and lower turnover and absenteeism.

In addition to raising the minimum wage, the rule also protects workers on
federal contracts by:

 * Ensuring the minimum wage is adjusted each year.
 * Raising the wage for workers with disabilities who may otherwise earn less
   than the minimum wage.
 * Ensuring that federal contract workers that receive tips receive at least 85%
   of the full minimum wage as their cash wage starting Jan. 1, 2023, and 100%
   starting Jan. 1, 2024.
 * Restoring minimum wage protections to workers that provide recreational
   services on federal lands. 

These changes apply to most new contracts, including renewals or extensions as
of Jan. 30, 2021. Andy they apply to federal contract workers in all 50 states,
as well as the District of Columbia, Puerto Rico, the Virgin Islands, Outer
Continental Shelf lands as defined in the Outer Continental Shelf Lands Act,
American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Wake
Island and Johnston Island.

As a public servant, I see every day how the work of federal contract workers
helps keep the government running and ensures that the American public gets
essential services and necessary resources. I am proud that Executive Order
14026 will benefit hundreds of thousands of hardworking people, their families
and our communities.

Want to learn more about this rule and what it means for employers? Register for
one of our federal contractor seminars on Jan. 26 or Jan. 27.

 

Jessica Looman is the acting administrator for the Department of Labor’s Wage
and Hour Division. Follow the agency on Twitter: @WHD_DOL.

Tags:
 * Wage and Hour Division (WHD)
 * minimum wage
 * federal contractors
 * regulation

 * We Hear You: How We’re Addressing Feedback
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