President Obama Announces Plans to Raise Minimum Wage for Federal Contractors


During the State of the Union address on January 28, 2014, President Obama discussed his plans to raise the minimum wage rate for workers employed through federal contracts.  The President stated he will implement the plan “in the coming weeks” through issuing an executive order, therefore bypassing any dealings with Congress.  Also during his speech, the President urged Congress to work towards raising the minimum wage nationwide as well.

The increase in wage will only affect new contracts signed, effective starting in 2015, and will not affect existing employees until their contracts are renewed after the effective date.  According to a statement issued by the White House, “[t]he increase will take effect for new contracts after the effective date of the order, so contractors will have time to prepare and price their bids accordingly.”  Currently, the federal minimum wage is $7.25, in which the President seeks to raise by 39 percent to $10.10 for federal contractors.  A few of the occupations that will be impacted by the wage increase includes kitchen and laundry workers on military bases, janitors at federal buildings, and construction workers at government building sites.

 

Sources:

http://www.businessmanagementdaily.com/37858/obama-to-order-higher-minimum-wage-for-fed-contractor-employees#_

http://politicalticker.blogs.cnn.com/2014/01/28/obama-to-raise-minimum-wage-for-federal-contractors/