Executive Order Increases Minimum Wage for Federal Contract Workers

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President Obama used his executive powers as promised in his State of the Union address and signed an Executive Order that will increase the minimum wage to $10.10 per hour for individuals working under federal contracts. The new wage will be effective January 1, 2015, for new contracts and will apply to all workers who perform services or construction under new federal contracts and subcontracts and replacements for existing contracts.  

Under the Executive Order, tipped workers must also receive a guaranteed $10.10 per hour through the combination of tips and the employer contribution. The Executive Order also requires covered employers to increase to $10.10 the minimum wage of certain individuals with disabilities who, pursuant to a special certificate program under the Fair Labor Standards Act, receive less pay because their disability affects their productivity.

The White House estimated the change will affect hundreds of thousands of people who work under contracts with the federal government. It remains to be seen whether Congress will heed President Obama’s call to “finish the job” and raise the minimum wage for all workers by passing the Harkin-Miller bill. 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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