Raising Wages for Federal Contract Workers

Progress and the well-being of working families requires an economy that works for everyone.

The Minimum Wage Executive Order signed by President Biden on April 27, 2021 and the implementing regulations adopted by the Department of Labor’s Wage and Hour Division ensure that workers on federal contracts receive a fair wage and demonstrate that government can lead by example.

Starting Jan. 30, 2022, we’re raising the minimum wage for federal contract workers to $15.00 per hour. This raise, affecting more than 300,000 workers, comes at a time of historic federal investment in our nation’s infrastructure that will create millions of new jobs in construction and related industries.

And while the $15 minimum wage will apply to construction workers, it will also apply to child care, health care, and building and other services workers employed on federal contracts. About 54% of the workers impacted by this minimum wage increase are women, and about 25% are workers of color. All of the workers who benefit from our minimum wage final rule will get an average raise of $5,228 per year.

Raising the minimum wage improves the economic security of families, reduces poverty and makes progress toward reversing decades of income inequality. Added benefits can also include better government services, higher morale and productivity, and lower turnover and absenteeism.

In addition to raising the minimum wage, the rule also protects workers on federal contracts by:

• Ensuring the minimum wage is adjusted each year.
• Raising the wage for workers with disabilities who may otherwise earn less than the minimum wage.
• Ensuring that federal contract workers that receive tips receive at least 85% of the full minimum wage as their cash wage starting Jan. 1, 2023, and 100% starting Jan. 1, 2024.
• Restoring minimum wage protections to workers that provide recreational services on federal lands. 

These changes apply to most new contracts, including renewals or extensions as of Jan. 30, 2021. Andy they apply to federal contract workers in all 50 states, as well as the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf lands as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Wake Island and Johnston Island.

As a public servant, I see every day how the work of federal contract workers helps keep the government running and ensures that the American public gets essential services and necessary resources. I am proud that Executive Order 14026 will benefit hundreds of thousands of hardworking people, their families and our communities.

Want to learn more about this rule and what it means for employers? Register for one of our federal contractor seminars on Jan. 26 or Jan. 27.

Jessica Looman is the acting administrator for the Department of Labor’s Wage and Hour Division. Follow the agency on Twitter: @WHD_DOL.