Federal Contractor Minimum Wage Increase

The minimum wage for federal contractors may increase to $15.00 on January 30, 2022, up from the current minimum wage of $10.95.

President Biden issued Executive Order 14026, which seeks to increase the minimum hourly wage by $4.05 for all federal contractor employees. If implemented:

  1. On January 30, 2022, all federal agencies must incorporate the new minimum wage into new federal contract solicitations;
  2. By March 30, 2022, all agencies must actually implement the new minimum wage into new contracts;
  3. Agencies must implement the new minimum wage into existing contracts if the parties elect to extend or renew the contracts; and
  4. The new minimum wage must automatically be adjusted for inflation each year after 2022, among other requirements.

Executive Order 14026 also seeks to phase out the tipped minimum wage for federal contractors by January 1, 2024.

Recently, the U.S. Department of Labor published a notice of proposed rulemaking to carry out Executive Order 14026. The public has until August 27, 2021 to submit comments on the proposed rule.

This entry was posted in Federal Contractor, Minimum Wage and tagged .

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