President Biden EO requires certain contractors to pay $15 per hour

On April 27, 2021, President Joe Biden issued Executive Order (EO) 14026, "Increasing the Minimum Wage for Federal Contractors," which will raise the minimum wage for workers on federal contracts (or subcontracts) to $15 per hour (up from $10.95) beginning January 30, 2022. The EO also raises the tipped minimum wage to $10.50 per hour (up from $7.65).

The EO requires that agencies incorporate the increased minimum wage into all new contracts entered into on or after January 30, 2022. Additionally, government agencies will need to implement the higher wage into existing contracts when contracts are extended or renewed each year. Beginning in 2023, the minimum wage will be subject to annual increases tied to the Consumer Price Index.

The EO updates an Obama-era EO that covers procurement contracts for services or construction covered by the Davis-Bacon Act, service contracts covered by the Service Contract Act, and concessions contractors and contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

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