UPDATE: July 21, 2021: The U.S. Department of Labor will publish Thursday its proposed rule implementing President Joe Biden's executive order to increase the minimum wage for federal contractors to $15 an hour. Members of the public may submit written comments on the proposal for a period of 30 days following its publication in The Federal Register.
Dive Brief:
- President Joe Biden signed an executive order Tuesday that raised the minimum wage for federal contract workers to $15 an hour.
- Agencies must begin incorporating the new rate into new contract solicitations starting Jan. 30, 2022. By March 30, agencies will need to implement the $15 minimum wage into all new contracts, Biden said. The order also eliminates for federal contractors the tipped minimum wage by 2024 and the subminimum wage for workers with disabilities.
- The current rate sits at $10.95 after former President Barack Obama raised it via executive order in February 2014. The increase will boost worker productivity "by boosting workers' health, morale, and effort," according to the executive order. In turn, it aims to reduce turnover and absenteeism.
Dive Insight:
The $15 minimum wage appears to be gaining momentum.
A number of companies — Target, Starbucks and Costco, for instance — raised their hourly starting rate to $15 or more. Several cities and states have instituted similar wage increases.
Biden touted his support for a nationwide $15 federal minimum wage several times throughout his campaign. The president's attitude toward a higher wage floor appears to resonate with many Americans; a July 2019 Pew Research poll found that two-thirds of respondents supported a federal minimum wage of $15 per hour.
The reception may be more varied among employers. Chipotle CFO Jack Hartung recently said a $15 minimum wage would be "very, very manageable," so long as it was accompanied by menu price hikes of 2% to 3%. Retailers have been relatively quiet amid growing talks of wage hikes. Many National Retail Federation members would "probably" support raising wages, according to David French, senior vice president of government relations at NRF, who spoke to HR Dive's sister publication Retail Dive.
