$15/hr for federal vendors in 2022

President Biden raises minimum wage for federal contractors

      Certain federal contractors will need to pay their workers at least $15 an hour, starting Jan. 30, 2022, under an Executive Order signed by President Joe Biden.

      The new wage applies to new contracts entered into on or after Jan. 30, 2022. It also applies to extensions and renewals of existing contracts after that date. Agencies are “strongly encouraged” to include the higher minimum wage in all new contracts immediately.

      The EO applies to contracts covered by the Service Contract Act, Fair Labor Standards Act and the Davis-Bacon Act, including contracts for services, concessions and construction,

      New federal contracts also must stipulate that contractors and covered subcontractors apply the minimum wage requirement into lower-tier subcontracts.

      The EO also phases out the tipped minimum wage for certain federal contractors:

• Starting Jan. 30, 2022, federal contractors must pay tipped workers $10.50 per hour;
• Starting Jan. 1, 2023, federal contractors must pay tipped workers 85% of the higher minimum wage;
• Starting Jan. 1, 2024, federal contractors must ensure that tipped workers, when including tips, earn at least the regular minimum wage.

      After 2022, the minimum wage will be adjusted for inflation each year.

      The stated goals of the EO were to enhance productivity with higher quality workers, reduce absenteeism and lower supervisory costs..

      The minimum wage rules do not apply to Indian tribes.

      Regulations for the new minimum wage will be issued in November.

More Information:
Executive Order: https://bit.ly/3e8SiRz

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