President Raises Minimum Wage For Federal Contractors
Barack Obama signed an executive order to raise the minimum wage for federal contractors. The rule impacts more than two million service-based contract workers. The updated wage is $10.10 per hour and begins on January 1, 2015. The order applies to workers who provide services to the federal government. It excludes workers supplying physical goods. The change signals a major jump from the broader federal minimum wage of $7.25 per hour.
Tipped Worker Pay and Employer Top-Up Rules
The order also updates wages for tipped employees under covered federal contracts. Employers must pay at least $4.90 per hour in base wages to tipped staff. If tips do not reach the full $10.10 minimum, the employer must top up the worker’s pay. This ensures total earnings meet the required hourly minimum. Many view the policy as part of a wider federal push to lift wage standards step by step. Some see it as a signal for future national wage discussions.
Compliance and Future Wage Outlook (Contracts)
Guidelines from the U.S. Department of Labor continue to protect workers from being paid below legal minimums. Employers that fail to follow pay, top-up, or contract wage rules may face penalties or worker complaints. The policy marks a turning point for contract service workers supporting the federal government. Additional federal wage policy changes may emerge in the future, so businesses and workers should stay informed.
