Federal government contractors have been directed to pay their employees a $15 per hour minimum wage, beginning January 30, 2022. This mandate comes from the Executive Order on Increasing the Minimum Wage for Federal Contractors, issued by President Biden on July 28, 2021.
Beyond increasing the minimum wage for federal contractors and subcontractors (beginning 2022), the amount will be recalculated annually (starting in January 2023), based on the Consumer Price Index.
Note: Should a federal government contractor’s employee work in a city or state with minimum wage laws higher than the federal contractor minimum wage, the employees must be paid at the higher amount. Additionally, the executive order and rules eliminate the tipped minimum wage for federal contract workers by 2024 and cover federal contract workers with disabilities.
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The information contained in this article is intended for educational purposes and to provide a general understanding of regulatory events, legislative changes and the law – not to provide specific legal advice. Employers are advised to discuss and/or receive counsel from their licensed legal or accounting professional, prior to implementing any new policy or policy change.