$15 minimum wage for federal contractors will take effect on Jan. 30

The Biden administration’s rule increasing the minimum wage for federal contractors to $15 an hour will take effect Jan. 30 the Labor Department announced Monday. 

The rule will increase the minimum wage for all workers involved in covered federal contracts and applies to all 50 states and Washington, D.C. It follows an executive order signed by President Biden on April 27 to increase the minimum wage for federal contractors from $10.95 an hour.

The rule will eliminate the tipped minimum wage for federal contract employees by 2024 and will continue to index the federal contract minimum wage to inflation in the future. It also ensures that workers with disabilities in connection with covered federal contracts receive $15 minimum wage. 

“[Federal contractors] 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,” Labor Secretary Marty Walsh said in a statement on Monday.

“Implementing this Executive Order improves the economic security of these workers and their families, many of whom are women and people of color,” he added.

The rule applies to all new, existing, and renewed contracts.

Biden, in a statement in April, said that the rule to raise the minimum wage “enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.” 

Democrats and organized labor have pushed for a similar minimum wage increase for all American workers, a provision of the president’s COVID-19 relief package that was ultimately cut by Biden and Senate Democrats earlier this year. The national minimum wage is $7.25 an hour.