Federal Contractors' Minimum Wage Increased To $15 By January, Biden Officials Confirm

President Joe Biden on Tuesday is expected to sign an executive order to raise the minimum wage for federal contractors to $15 an hour by January, senior administration officials revealed Tuesday. Agencies are expected to implement the legislation by March 30, 2022.

A senior Biden administration official predicted that hundreds of thousands of federal contractors would benefit from the new measure. The minimum wage for federal contractors is currently $10.95 an hour.

The new legislation includes a cost-of-living increase every year beginning in 2022. Federal contract workers with disabilities also will be covered by the order.

"These workers are critical to the functioning of the federal government, from cleaning professionals and maintenance workers ... to nursing assistants who care for the nation's veterans, to cafeteria and other food service workers who ensure military members have healthy and nutritious food to eat, to laborers who build and repair federal infrastructure," the official told NBC News.

The new measure also would direct federal agencies to raise the minimum hourly wage of tipped employees with federal contracts from $7.65 to $15 per hour.

“Employers may seek to raise wages for workers earning above $15 as they try to recruit and retain talent,” a White House press release stated. “And, research shows that when the minimum wage is increased, the workers who benefit spend more, a dynamic that can help boost local economies.”

Biden’s executive order will build on a measure in the Obama-Biden era, issued in February 2014, that raised the minimum wage for employees with federal contracts to $10.10 per hour.

The Congressional Budget Office released a study in February that found raising the federal minimum wage to $15 could potentially lift a million people out of poverty over the course of four years. However, the executive order could also cause the loss of 1.4 million jobs and raise the prices for goods and services.

The Economic Policy Institute estimated that the new measure could benefit up to 390,000 low-wage federal contractors and bump up the average annual pay increase for year-round workers to approximately $3,100. Roughly half of those expected to see their wages increase will be women and roughly half will be Black or Hispanic.