Joe Biden to issue executive order implementing $15-an-hour minimum wage for federal contractors

  • Joe Biden is set to issue an order enacting a $15-an-hour minimum wage for federal contractors.
  • It’d take effect no later than March 30, 2022, raising pay for hundreds of thousands of employees.
  • It stops well short of an increase to the federal minimum wage, which requires Congress to act.
  • See more stories on Insider’s business page.

President Joe Biden is set to issue an executive order Tuesday to enact a $15-an-hour minimum wage for federal contractors.

The order would increase the hourly minimum wage for workers on federal contracts no later than March 30, 2022, almost a year from now. Officials in the Biden administration estimate the measure will benefit hundreds of thousands of government contractors and argue it will not raise the financial burden on taxpayers.

“It would not increase costs for taxpayers, because it would raise productivity and lower other costs like supervisory training costs,” a senior administration official told reporters on a Monday phone call.

Shortly after taking office in January, Biden ordered his administration to kickstart the review process on federal contractor pay. Hourly compensation for federal contractors hasn’t increased since 2014, when President Barack Obama similarly took executive action to raise it. It stands at $10.95 an hour.

Advocates had been pressing Biden to raise pay for federal contract workers in the interim.

“All federal contract workers deserve good jobs,” Carla Walter, the senior director at Center for American Progress Action, said in an April 9 statement. “A focus on service workers is essential to ensuring that the contract workers who are among the worst paid and continue to bear the brunt of long-standing racial and gender disparities aren’t left behind.”

Yet the order also demonstrates the limits of the president’s reach, as it stops well short of a pay increase for millions of private-sector workers. An act from Congress is required to lift the federal minimum wage for employees, which has not been increased from $7.25 an hour since 2009. It’s a top priority for many congressional Democrats.

A Senate official tossed out a $15-minimum-wage provision from the recent stimulus law because it violated certain budgetary rules in the upper chamber.

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