Legal Update – Department of Labor Proposes Increased Wages for Federal Contractors
Implementing the Executive Order
On April 27, 2021, President Joe Biden issued an executive order requiring federal contractors to increase the minimum wage rate for their employees.
- On July 21, 2021, The U.S. Department of Labor (DOL) announced a proposed rule that would increase the minimum wage rate for federal contractor employees to $15 per hour starting on Jan. 30, 2022.
- Beginning Jan. 1, 2023, and annually thereafter, the wage rate for federal contractors would be adjusted to reflect the cost of inflation.
- The proposal also increases the wages for tipped employees working for federal contractors to $10.50 per hour on Jan. 30, 2022.
- Employers must ensure that tipped employees receive compensation at least equal to the minimum wage rate.