Thousands of workers in the D.C. region will be due for a raise after President Joe Biden signs an executive order mandating a $15 minimum wage for federal contractors.
The president is scheduled to sign the order Tuesday, kicking off a rulemaking process that would conclude next year. All federal agencies would be required to include a $15 minimum wage in their contracts by March 30, 2022.
“These workers are critical to the functioning of the federal government: from cleaning professionals and maintenance workers who ensure federal employees have safe and clean places to work, to nursing assistants who care for the nation’s veterans, to cafeteria and other food service workers who ensure military members have healthy and nutritious food to eat, to laborers who build and repair federal infrastructure,” the Biden administration said in a fact sheet announcing the order.
It’s not clear how many contract workers earn less than $15 an hour in the D.C. region, but administration officials estimate the mandate will affect a few hundred-thousand people. Federal contractors are currently required to pay a minimum of $10.95, significantly less than D.C.’s base wage of $15. The statewide minimum wage in Maryland will hit $15 for larger employers in 2025; in Virginia, the wage is scheduled to reach $15 by 2026, pending legislative approval.
The order will also phase out the tipped minimum wage for contract workers by 2024. Under current rules, federal contractors can pay some workers $7.65 an hour if they make up the rest in gratuities.
The House of Representatives passed a bill in 2019 that would raise the federal minimum wage to $15, up from the current $7.25, which went into effect in 2007. Biden also called for a national $15 base wage as part of his $1.9 trillion coronavirus relief package, but it was tossed out after the Senate’s parliamentarian said it couldn’t be included in a budget measure. Congressional Republicans have repeatedly argued that wage hikes will kill jobs.
Supporters of raising the minimum wage say better pay leads to higher productivity and better retention of workers, which can lead to cost savings over time. Biden administration officials said much the same in a call with reporters this week, adding that benefits of higher wages could cancel out any added costs for taxpayers.
“At the same time, the executive order ensures that hundreds of thousands of workers no longer have to work full time and still live in poverty,” the administration added.
After the wage increase goes into effect, future raises will be tied to inflation, officials said. President Barack Obama signed a similar order in 2014 that raised federal contractors’ base wages to $10.10, also indexed to inflation.
Ally Schweitzer