Federal contractors will have to pay a $15 minimum wage to employees who work on federal contracts, as per a new executive order issued by President Joe Biden on Tuesday.
The employees include cleaning professionals and maintenance workers, nursing assistants who care for veterans, cafeteria and other food service workers who serve military members, and laborers who build and repair federal infrastructure.
The hourly minimum wage is required to be increased to $15 by all federal agencies in their new contracts by March 30, 2022.
Hundreds of thousands of workers are expected to benefit from the president’s order.
The current minimum wage that federal contractors are required to pay as part of federal contracts is $10.95 per hour. The tipped minimum wage for federal contractors is currently $7.65 per hour, which is now ordered to be eliminated by 2024 in order to ensure that tipped employees working on federal contracts will earn the same minimum wage as others.
“This executive order will promote economy and efficiency in federal contracting, providing value for taxpayers by enhancing worker productivity and generating higher-quality work by boosting workers’ health, morale, and effort,” said the Biden administration in its announcement.
“At the same time, the executive order ensures that hundreds of thousands of workers no longer have to work full time and still live in poverty. It will improve the economic security of families and make progress toward reversing decades of income inequality,” it was added.