As previewed, on April 27, 2021 President Biden issued an Executive Order directing the minimum wage for certain federal contractors be increased to $15 per hour.  The Executive Order on Increasing the Minimum Wage for Federal Contractors states that the minimum wage for certain hourly workers be increased to $15 per hour for new or renewed contracts beginning January 30, 2022.  The Executive Order also dictates that wages for tipped workers be increased to $10.50 per hour, beginning January 30, 2022 (again for new or renewed contracts).

As justification for the increase, the Executive Order explains that

[r]aising the minimum wage enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.  Accordingly, ensuring that Federal contractors pay their workers an hourly wage of at least $15.00 will bolster economy and efficiency in Federal procurement.

The executive order supersedes the Obama-era Federal Minimum Wage Executive Order but seems to have similar applicability – contracts for concessions, and those governed by the Service Contract Act, Davis Bacon Act as well as contracts in “connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.”

Pursuant to the Executive Order, the Secretary of Labor, “shall, consistent with applicable law, issue regulations by November 24, 2021, to implement the requirements of this order.” As such, we will need to await the regulations before have the full understanding of applicability and implementing obligations.

As always, we will bring you updates as soon as they become available.

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Photo of Laura A. Mitchell Laura A. Mitchell

Laura Mitchell is a principal in the Denver office of Jackson Lewis P.C. and leads the firm’s Workplace Analytics and Preventive Strategies Pay Equity subgroup. She partners with employers to evaluate, develop and implement policies and practices that ensure workplace fairness while mitigating…

Laura Mitchell is a principal in the Denver office of Jackson Lewis P.C. and leads the firm’s Workplace Analytics and Preventive Strategies Pay Equity subgroup. She partners with employers to evaluate, develop and implement policies and practices that ensure workplace fairness while mitigating legal risk. Laura is a guiding force in the firm’s most specialized and technical practice areas where she leverages an analytics-focused approach to partner with her clients in building legally compliant programs around which they can anchor their workplaces achieving productivity and stability.

Laura understands that creating a competitive advantage for employers in today’s workplace involves using a data-driven approach to counsel companies on the development of proactive and equitable non-discriminatory practices in hiring, promotions, separations and pay—and where advancements in technology can create both opportunities for efficiencies and risk that can be measured. Committed to putting her clients’ organizational goals first and foremost while balancing legal risk, Laura views herself as an extension of her clients’ team, responsible for providing proactive guidance and engaging in transparent, ongoing communication. Staying the course with employers across their organizational journey while balancing legal compliance obligations throughout their employees’ lifecycle ensures Laura’s position as a go-to resource.

Laura works with companies across all industries—both new and well-established multi-national organizations of all sizes—to realize the combined vision of legal compliance, increased productivity and economic growth enhanced by a focus on pay equity.  As part of the pay equity journey, she advises employers on the evolving pay transparency landscape, working to align compliant practices with the practical realities of the business world.

Laura partners closely with government contractors to understand, implement and demonstrate compliance with their EEO regulatory and compliance obligations. She also works closely with non-government contractor clients to conduct risk assessments of their programs, policies, and training to align with federal and state anti-discrimination requirements.

Laura is the editor and a principal contributor of the GovCon Employment Exchange blog and presents on pay equity and government contractor obligations. To round out her days, Laura enjoys spending time with her family and friends attending sports events, working out, riding her bike, playing pickleball and taking in Colorado’s incomparable sunsets.