A new Executive Order (E.O.) 14026 signed by President Joe Biden on April 27, 2021, will require certain federal contractors and subcontractors to pay a minimum wage of $15 an hour to employees working on covered federal contracts beginning next year, well above the current federal minimum wage of $7.25 applying to most employers and the $10.95 applying to a similar group of contractors under E.O. 13658 issued by former President Obama in 2014.
As was the case with the Obama E.O. that it supersedes, new E.O. 14026 applies only to certain workers performing work under specified types of government contracts and appears to exclude contracts for materials and supplies, although the E.O. does not explicitly state this. The new E.O. also contains an escalator clause requiring an annual upward adjustment in the mandated hourly rate due to inflation, as well as effectively phases out the use of the tip credit under covered federal contracts by 2024.
Members of the Center for Workplace Compliance (CWC) can read more here.