On April 27, 2021, the Biden Administration issued an executive order raising the minimum wage for federal contractor workers from $10.95 per hour to $15.00 per hour, with additional increases scheduled to take effect annually to account for inflation and changes in the cost of living. Per a White House release, this wage increase will impact hundreds of thousands of workers across the country.
The executive order will also eliminate the tipped minimum wage https://www.missouriemploymentlawattorney.com/practice-areas/wage-hour-law/tipped-employees/ for federal contractor workers by 2024. This change comes after the Obama Administration had raised the minimum wage rate for tipped employees. According to the White House, “[t]his executive order finishes that work and ensures tipped employees working on federal contracts will earn the same minimum wage as other employees on federal contracts.”
The White House predicts that these changes will, among other things, boost productivity, reduce turnover and absenteeism, and reduce supervisory costs. Per the executive order, the Department of Labor’s Wage and Hour Division will engage in rulemaking to implement and enforce the order. Stay tuned for further developments in this space.