Agencies will need to incorporate the $15 minimum wage in new contract solicitations starting January 30 and to implement the threshold in new contracts by March 30. Agencies must implement the higher wage in existing contracts when they are extended, which often happens annually.
The wage will be adjusted yearly based on the increase in inflation.
Tuesday’s order will provide a big pay hike to a wide range of workers, including cleaning professionals and maintenance workers, nursing assistants who care for veterans, cafeteria and other food service workers, and laborers who build and repair federal infrastructure.
The effort will not lead to reduced employment or hurt the businesses that hire federal contractors, according to senior administration officials. Also, it will not result in increased costs for taxpayers, they said.
That’s largely because the wage increase will enhance worker productivity and generate higher-quality work by boosting workers’ health, morale and effort, the officials said. It will lower turnover, absenteeism and supervisory costs.
The pay raise also will help reduce decades of income inequality and improve families’ economic security, particularly for women and people of color, according to a fact sheet distributed by the administration.