Federal contractor minimum wage is going up

The U.S. Department of Labor has unveiled a new rule that will increase the minimum wage rate for federal contractor employees to $15 an hour on Jan. 30, 2022 in line with an Executive Order on contractor pay.

The rule also allows the DOL to adjust that minimum wage rate starting Jan. 1, 2023, and it creates rules and regulations to implement minimum wage protections created by the executive order. That $15 wage applies to contracts entered into on or after Jan. 30, 2022.

A previous executive order increases federal contractor minimum wage to $11.25 per hour on Jan. 1, 2022 ($7.90 for tipped employees) for contracts awarded on or between Jan. 1, 2015, and Jan. 29, 2022 that are not renewed or extended after Jan. 30, 2022.

The timing for entering into, renewing or extending work under a federal contract determines which minimum wage rate applies, so federal contractors need to determine which set of rules apply based on their contract date.