• Jackson Shields Yeiser

Proposed Rulemaking to Increase Hourly Minimum Wage for Workers on Government Contracts

By B. Alan Matthews

July 21, 2021


On July 21, 2021, the U.S. Department of Labor announced a Notice of Proposed Rulemaking to establish standards and procedures to implement and enforce Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors,” signed by President Biden on April 27, 2021.

This Executive Order and its enacting regulations will: (1) increase the minimum wage for workers performing work on or in connection with covered federal contracts to $15 per hour beginning January 30, 2022; (2) continue to index the federal contract minimum wage in future years to an inflation measure; (3) eliminate the tipped minimum wage for federal contract workers by 2024; (4) ensure a $15 minimum wage for workers with disabilities performing work on or in connection with covered contracts; and (5) restore minimum wage protections to outfitters and guides operating on federal lands.

Executive Order 14026 builds on President Obama’s 2014 Executive Order, “Establishing a Minimum Wage for Federal Contractors.” The earlier order increased the hourly minimum wage on January 1, 2015, to $10.10 for workers performing on or in connection with covered federal contracts; and that the hourly minimum wage be increased annually after that based on inflation. The current federal contract minimum wage under Obama’s 2014 Executive Order is $10.95 per hour.

The public can comment on the proposed rule at www.regulations.gov. The comment period closes on August 23, 2021.