In April, President Joe Biden issued an executive order calling for an increase in the minimum wage for employees of federal contractors from $10.95 to $15 per hour. Last week, the Department of Labor issued proposed rules that would implement this requirement. The new minimum wage would need to be included in all federal contract bids beginning in January, and the increased rate will apply for all new contracts beginning in March. The proposal would also eliminate the tip credit for employees of federal contractors beginning next year.

This proposal may have little effect on contractors, depending on their location and industry. In many parts of the U.S., the vast majority of workers involved with federal contracts already make in excess of the new, higher minimum wage. The new rule will likely have the greatest impact on contractors in lower wage parts of the country, along with those in traditionally lower wage industries such as concessions. DOL is accepting comments on the proposal through August 23.

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