The U.S. Department of Labor announced Monday a final rule implementing President Joe Biden’s executive order raising the federal contractor minimum wage to $15 an hour. The final rule retains the Jan. 30, 2022, deadline by which agencies must incorporate the new rate into new contract solicitations.
The requirements apply to federal contractors that perform work in all 50 U.S. states as well as U.S. territories, Jessica Looman, Acting Administrator of DOL’s Wage and Hour Division, said during a media briefing Monday. It also ends the tip credit as well as the subminimum wage provision for certain employees with disabilities.
The new rate does not apply to eligible federal contracts entered into before Jan. 30, 2022, but will apply to extensions of such contracts finalized after the deadline. Beginning Jan. 1, 2023, the minimum wage will increase annually by an amount determined by the Secretary of Labor. Looman said the agency would soon provide guidance and educational outreach to contractors on how to implement the rule.