Biden to Impose $15 Hourly Minimum Wage for Federal Contractors – News 24-7 Live News 24-7 Live
Biden to Impose $15 Hourly Minimum Wage for Federal Contractors

Biden to Impose $15 Hourly Minimum Wage for Federal Contractors

President Joe Biden will sign an executive order Tuesday raising the minimum wage to $15 for federal contractors, delivering for hundreds of thousands of workers what he was unable to do on a broader basis because of pushback from Republicans and some Democrats on Capitol Hill.

The order will require federal agencies to incorporate a $15 minimum wage in all contract solicitations starting Jan. 30, 2022. By March 30 of next year, agencies will have to implement the higher wage in new contracts. The rule also applies to contractors exercising their right to extend existing contracts – something that often occurs annually, the Biden administration said in a statement.

“This executive order will promote economy and efficiency in federal contracting, providing value for taxpayers by enhancing worker productivity and generating higher-quality work by boosting workers’ health, morale, and effort,” the administration said in announcing the new rules.

“It will reduce turnover, allowing employers to retain top talent and lower the costs associated with recruitment and training. It will reduce absenteeism, a change that has been linked to higher productivity, not just by the employees who are more present, but by their co-workers, too.”

Further, the administration said, the higher wage could end up saving money in supervisory costs. It cited a recent study showing that productivity rises with hourly wage, with a $1-an-hour increase associated with a $1.50-an-hour savings.

The $15 an hour is a dramatic increase from existing rules, implemented in 2014, during the Obama administration, setting minimum wages for federal contractors at $10.10 per hour and indexed to inflation. The inflationary increases mean the current minimum for federal contractors in $10.95 an hour.

While the higher pay only applies to people working on federal contracts, it can have a ripple effect on private industry wages as companies compete with the federal government and contractors for employees. The $15-an-hour pay is especially critical for workers such as maintenance and cleaning employees, cafeteria workers and nursing assistants caring for veterans, the administration said.

Democrats sought to raise the federal minimum wage – now $7.25 an hour – to $15 an hour, phased in over five years. Republicans and a couple of Democrats balked, saying the increase would lead to job losses and were too high for states with lower costs of living.

News Source: US News

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