- Workers on federal contracts will have a new minimum wage of $15 an hour starting January 30, 2022.
- The Department of Labor announced Monday that it had finalized implementation of the hike.
- The hike will impact over 300,000 workers, according to the Labor Department.
For up to 390,000 workers, a $15 minimum wage is about to be a reality.
On Monday, the Department of Labor finalized its regulations for implementing a $15 minimum wage for federal contractors. It builds on an executive order President Joe Biden signed in April that would hike pay for workers under federal contracts. Now, that raise will go into effect on January 30, 2022 for new and renewed contracts, according to the Labor Department.
"The fact is, contract workers are essential workers, and critical to the federal government," Labor Secretary Marty Walsh said in remarks on the final rule.
According to the Wall Street Journal, Labor Department officials said that around 327,000 contractors will benefit from the hike; New York University professor Paul Light told the Journal that the government employs about five million contractors.
The left-leaning Economic Policy estimates that the number of workers who benefit may come in even higher. EPI economist Ben Zipperer found that up to 390,000 workers will benefit — with pay going up by $3,100 annually. Half of the workers who will be impacted are Black and Hispanic, according to EPI.
The new regulations will also eliminate the tipped wage for federally contracted employees. Their pay will go up to a minimum of $10.50 on January 30, with the tipped wage phased out completely by January 1, 2024. Currently, the minimum cash wage requirement is $7.65 an hour.
For a small subset of workers, the regulations accomplish a Biden campaign push that the administration still has not been able to implement nation-wide: A $15 minimum wage. The Raise the Wage Act, which would have brought the federal minimum up to $15 by 2025, was advised to be ineligible to go through party-line reconciliation as part of Biden's first stimulus package. Eight Democratic senators then voted against putting the raise back into the package — including key centrists like Sens. Kyrsten Sinema and Joe Manchin.
July marked 12 years since the federal minimum was last raised; it still sits at $7.25 an hour. "I'm just not hearing much talk about it right now," Sen. Elizabeth Warren of Massachusetts told Insider in July. "Democrats should tackle the minimum wage again."
White House Press Secretary Jen Psaki said in October that Biden "absolutely" wants to bring the minimum wage up to $15, and that he thinks it's "long overdue." In January, EPI found that 32 million workers would benefit from a federal minimum wage of $15; that includes one-third of Black workers.
While the nationwide federal wage doesn't seem to be budging anytime soon — even as some employers scramble to raise pay in an attempt to retain and attract workers — the wage workers on federal contracts receive will make Biden's wish somewhat of a reality.
"This executive order improves the economic security of their families and communities, and makes progress towards reversing decades of income inequality," Walsh said. "And it ensures that the federal government leads by example — creating good jobs for workers all across our country."