Biden Issues Executive Order on Increasing the Minimum Wage for Federal Contractors

Posted on May 5, 2021 by Jonathan Lips

On April 27, President Biden issued an Executive Order to increase the federal minimum wage for employees of federal contractors to $15 per hour.

LeadingAge, our national partner, has explained that this does not apply to providers who simply accept payment under Medicare and Medicaid. Such providers are not federal contractors under this Executive Order just because they receive reimbursement under those programs. However, it would apply to those nursing homes and other provider types that specifically contract with the Veterans Administration (VA) to care for veterans who are veterans and get reimbursed through the VA system. 

The change does not take effect immediately but will apply to new or renewed contracts beginning Jan. 30, 2022.  This action by President Biden builds on an effort of the Obama administration in 2014 when a Department of Labor final rule increased the minimum wage for federal contractors to $10.10 per hour, which has since climbed to a current rate of $10.95 per hour based on inflationary increases.

This would apply to new federal contracts starting after March 30, 2022. The Executive Order directs the U.S. Department of Labor to issue regulations on this increase by Nov. 24, 2021. We will follow this story and provide more details for members in the months ahead.