With the help of the US Department of Labor (DOL), the Biden Administration made good on its promise to increase the minimum wage for workers who work on new or updated federal contracts (including extended, renewed, or exercise of an option on an existing contract). The President’s full Executive Order may be found on the White House website.
This was carried out by the DOL on November 22, 2021 with its Final Rule requiring that such workers’ minimum pay will now be $15.00 an hour starting January 30, 2022. Keep in mind if your local or state minimum wage is more, you have to pay the higher minimum wage so this new law will not affect those employees already earning more money. The Rule allows for an annual raise to keep in line with inflation as set by the Secretary of Labor. The new minimum wage is also going to flow down to sub-contracts as well.
Tipped employees earned progressive bumps along the way: $10.50 an hour starting on January 30, 2022; 85% of the federal wage in effect as of January 1, 2023 (rounded to nearest $0.05); and full federal minimum wage in effect as of January 1, 2024 and beyond.
No. Much like the vaccination mandate for federal contractors, this new Rule generally applies to the following types of federal contracts (so long as the wages of these workers are governed by the Fair Labor Standards Act, the Service Contract Act and/or the Davis-Bacon Act):
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