Biden’s New Executive Order Increases Minimum Wage For Federal Contractors

On Tuesday in a new executive order, President Joe Biden has raised the minimum wage to $15 for all federal contractors. This change has also expanded an executive order from the Obama era to apply the minimum wage to all tipped employees working through federal contracts.

The White House, in a release giving details about the order, stated: “These workers are critical to the functioning of the federal government: from cleaning professionals and maintenance workers who ensure federal employees have safe and clean places to work, 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.”

Reportedly, the order will see an increase in the hourly minimum wage for all federal contracts to $15 starting on January 30, 2022, to be used in all new contract solicitations. Per the order, by March 30, 2022, every agency must implement the new minimum wage amount into all new contracts. The minimum wage must also be periodically adjusted as per an inflation measure “so that every year after 2022 it will be automatically adjusted to reflect changes in the cost of living.”

The order will the idea of a tipped minimum wage for all federal contractors by 2024. This applies to a statute that allows the employers to pay a “sub-minimum wage” as long as the tips brought in by the worker bring their wages up to a level matching the minimum wage. During the Obama administrations, there was an executive order was issued that raised all minimum wage requirements for tipped workers. With Biden’s new order about the minimum wage requirements,  it will make sure that all tipped employees who are working as federal contractors will be making the same minimum wage as all other federal contract employees.

The document about the executive order also went on to explain how the new executive order would “ensure equity,” making note that the order expands the required $15 minimum wage to include even federal contract workers with disabilities, expanding on the Obama era order.

The Biden administration also talked about the executive order that was signed and set in place back in 2018 by former President Donald Trump. The Trump administration executive order created an exemption for applying the minimum wage to guides and outfitters who worked on all federal lands. The order in question stated, “These individuals often conduct multiday recreational tours through Federal lands, and may be required to work substantial overtime hours. The implementation of [the Obama-era] Executive Order 13658 threatens to raise significantly the cost of guided hikes and tours on Federal lands, preventing many visitors from enjoying the great beauty of America’s outdoors.” The Trump administration executive order put forth the argument that the minimum wage implemented by former President Obama should apply to only “lodging and food services associated with seasonal recreational services,” but seeing this expanded to apply to outfitters and guides would “not promote economy and efficiency in making these services available to those who seek to enjoy our Federal lands.”

The new order from Biden would overturn President Trump’s executive order and return “minimum wage protections to outfitters and guides operating on federal lands[.]”

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