President Obama signed an Executive Order raising the Federal Minimum Wage to $10.10 per hour for all Federal Contractors. This order includes a raise for individuals with intellectual and developmental disabilities who may currently work under special minimum wage certificates on Federal Contracts. Highlights of the order are listed below. To read the full order click here.
Raising the Minimum Wage through Executive Order to $10.10 for Federal Contract Workers
Details of the Executive Order
- The Executive Order will raise the minimum wage to $10.10 effective for new contracts beginning January 1, 2015. The higher wage will apply to new contracts and replacements for expiring contracts.
- Benefits hundreds of thousands of hardworking Americans. There are hundreds of thousands of people working under contracts with the federal government to provide services or construction who are currently making less than $10.10 an hour.
- Includes an increase in the tipped minimum wage. This executive order also includes provisions to make sure that tipped workers earn at least $10.10 overall, through a combination of tips and an employer contribution. Employers are currently required to pay a minimum base wage of $2.13 per hour, a base that has remained unchanged for over twenty years, and if a worker’s tips do not add up to the minimum wage, the employer must make up the difference. Under the Executive Order, employers are required to ensure that tipped workers earn at least $10.10 an hour. The Executive Order requires that employers pay a minimum base wage of $4.90 for new contracts and replacements for expiring contracts put out for bid after January 1, 2015. That amount increases by 95 cents per year until it reaches 70 percent of the regular minimum wage, and if a worker’s tips do not add up to at least $10.10, the employer will be required to pay the difference.
- Covers individuals with disabilities. Under current law, workers whose productivity is affected because of their disabilities may be paid less than the wage paid to others doing the same job under certain specialized certificate programs. Under this Executive Order, all individuals working under service or concessions contracts with the federal government will be covered by the same $10.10 per hour minimum wage protections.
- Value for the federal government and taxpayers. The increase will take effect for new contracts and replacements for expiring contracts put out for bid after the effective date of the order, so contractors will have time to prepare and price their bids accordingly.