DOL Finalizes $15 Min. Wage for Federal Contractors

The U.S. Department of Labor (DOL) has fleshed out the terms of President Joe Biden’s (D) executive order calling for federal contractors to pay workers at least $15 an hour, issuing a final rule that will apply to new and renewed contracts starting Jan. 30.

As a result of this rule, linen, uniform and facility services companies providing services for the government will be subject to a minimum wage that’s more than $4 per hour higher than the current pay floor on federal contracts established in the administration of former President Barack Obama (D).

After the White House failed in its efforts last spring to include a $15 minimum wage for the entire private sector in the COVID relief bill, the DOL rule demonstrates the administration’s commitment to improve low-income Americans’ economic security through the more moderate lever afforded by federal purchasing power.

Just like the terms of the Obama measure, the new DOL rules call for updating the pay level each year to keep pace with inflation and defines the word “contract” broadly to include any type of “contract-like instrument.” But in a key change of direction that’s contributing to estimates that the rule will boost wages for 327,000 employees in its first year, the $15 minimum wage also will be inserted in existing contracts whenever they have their options exercised.