WASHINGTON (AP) – President Biden is set to sign an executive order raising the minimum wage for federal contractors to $ 15 an hour, paying hundreds of thousands of workers.
Biden administration officials say higher wages will lead to greater employee productivity, offsetting any additional taxpayer costs. Officials spoke on condition of anonymity before discussing personal conversations before signing on Tuesday.
Officials could not give exact figures on how many federal contractors would be promoted, only to be in the hundreds of thousands. According to the Institute of Bruising, professor of public policy at New York University, according to records posted last year, the federal government has about 5 million contract workers.
The increase could be sharp for employees who currently earn at least $ 10.95 an hour. These workers would receive a 37% pay rise, although the increase under the terms of the order would be gradual.
All federal agencies must include higher salaries in new contract offers by January 30 next year. By March 30, agencies must invest higher salaries in new contracts. Growth will also be in existing contracts, which are being extended.
Wages were indexed to inflation, so it would automatically increase each year, reflecting price changes. The minimum wage for federal contractors at $ 7.65 per hour will be replaced by the standard minimum by 2024.
Biden has pushed for a $ 15 minimum wage for all workers in the country, making it part of his coronavirus package. But the Senate lawmaker said the pay rise did not follow budget rules that allowed the $ 1.9 trillion bill to pass by a simple majority, so it was not included in the bill passed in March.