New Federal Contractors Will Earn $15 Minimum Wage On Jan. 30, But Older Ones Left Out

Federal contractors will begin earning a minimum wage of $15 per hour starting on Jan. 30 after an executive order in April from President Joe Biden.

According to the Department of Labor, this rule will apply to contractors in every state and in the District of Columbia for every employee of a federal contractor who begins work after Jan. 30. The department added that the minimum wage will continue to be in line with inflation, ensures a $15 minimum wage for workers with disabilities performing work on or in connection with covered contracts, and restores wage protections to guides on federal lands.

The new rule also eliminates what is known as the tipped minimum wage. The tipped minimum wage allows employers, such as those working in food service, to be paid less than the federal minimum wage if workers make up the difference through tips.

Secretary of Labor Marty Walsh said that by following through on the executive order, the rule change "improves the economic security of these workers and their families, many of whom are women and people of color.”

“The workers helped by Executive Order 14026 and today’s final rule do essential work on our nation’s behalf. 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,” said Walsh.

The decision by President Biden follows along the path of other pro-labor moves by the administration, like improving worker protections and improving on the funding for union pension funds. Biden has touted himself as a champion of unions, promising at one point to make his presidency the most “pro-union” ever.

The rule does not apply to contracts signed prior to the executive order’s implementation date. This can be significant given that the current federal contractor population stands at around 5 million workers and their contracts generally last between three and five years.