Labor Department rule raising hourly minimum wage for federal contractors to $15


The US Department of Labor today announced a final rule that increases the hourly minimum wage for employees on federal contracts to $15. It applies to all 50 states, and the new minimum wage is set to take effect on Jan. 30 for new contracts, renewals and extensions of existing contracts.

Going forward, the rule will index the federal contract minimum wage to inflation.

“The final rule adds value for taxpayers by boosting worker productivity and reducing employee turnover and absenteeism,” said Jessica Looman, Department of Labor Wage and Hour Division acting administrator. “It also allows federal contractors to retain top talent and reduce recruiting and training costs.”

Presently, the hourly minimum wage for employees on federal contracts is $10.95.

Today’s rule also eliminates the tipped minimum wage for federal contract employees by 2024 and ensures a $15 minimum wage for workers with disabilities performing work on or in connection with covered contracts.

The rule implements Executive Order 14026 that President Biden signed in April.