As previewed, on April 27, 2021 President Biden issued an Executive Order directing the minimum wage for certain federal contractors be increased to $15 per hour.  The Executive Order on Increasing the Minimum Wage for Federal Contractors states that the minimum wage for certain hourly workers be increased to $15 per hour for new or renewed contracts beginning January 30, 2022.  The Executive Order also dictates that wages for tipped workers be increased to $10.50 per hour, beginning January 30, 2022 (again for new or renewed contracts).

As justification for the increase, the Executive Order explains that

[r]aising the minimum wage enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.  Accordingly, ensuring that Federal contractors pay their workers an hourly wage of at least $15.00 will bolster economy and efficiency in Federal procurement.

The executive order supersedes the Obama-era Federal Minimum Wage Executive Order but seems to have similar applicability – contracts for concessions, and those governed by the Service Contract Act, Davis Bacon Act as well as contracts in “connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.”

Pursuant to the Executive Order, the Secretary of Labor, “shall, consistent with applicable law, issue regulations by November 24, 2021, to implement the requirements of this order.” As such, we will need to await the regulations before have the full understanding of applicability and implementing obligations.

As always, we will bring you updates as soon as they become available.

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Photo of Laura A. Mitchell Laura A. Mitchell

As co-leader of the firm’s ESG group, Laura Mitchell partners with her clients to evaluate, set, achieve and monitor their organizational culture and human capital goals. She focuses her practice on data analytics, including pay equity and other employee analytics, working side-by-side with…

As co-leader of the firm’s ESG group, Laura Mitchell partners with her clients to evaluate, set, achieve and monitor their organizational culture and human capital goals. She focuses her practice on data analytics, including pay equity and other employee analytics, working side-by-side with employers to build programs that benefit employees and create a stable, high-functioning workplace. Understanding that an inclusive, values-based culture provides a crucial competitive advantage in the modern workplace, Laura enjoys counseling companies on the development of proactive and equitable pay and diversity practices.

In Laura’s version of the reimagined workplace, attention to human capital issues, especially DEI and pay equity, would be the rule rather than the exception nationwide and she works with companies across all industries—both new and well-established multi-national organizations of all sizes—to realize this vision for her clients’ ongoing success. She helps clients understand all issues across the spectrum of their journey, helping to establish regular analyses as well as counseling organizations on implementation and compliance obligations, where applicable. Committed to putting her clients’ organizational goals first and foremost, Laura views herself as an extension of her clients’ team, responsible for providing proactive guidance and engaging in transparent, ongoing communication.

Laura also represents companies in OFCCP matters, preparing for and defending OFCCP audits, and counseling employers on issues stemming from OFCCP regulations. She personally oversees the development of hundreds of Affirmative Action Plans for clients each year and is intimately involved in the defense of OFCCP audits. Her approach to compliance is one of facilitation and conciliation while simultaneously advocating in the best interests of her clients.