President Biden Orders a $15.00 Minimum Wage for Some Federal Contractor Employees Effective Next Year

Arnold & Porter – On April 21, 2021, President Joe Biden signed an Executive Order (EO) that, beginning on January 30, 2022, raises the minimum wage for prime contractor and subcontractor employees performing covered contracts or contract-like instruments (Covered Contracts) from $10.95 to $15.00 per hour, adjusted annually for inflation. For tipped employees, the Executive Order allows employers to claim a $4.50 tip credit in 2022 against the $15.00 minimum wage for a minimum cash wage of $10.50 per hour. That tip credit gradually phases out until January 1, 2024, when tipped employees must receive the full minimum wage, adjusted for inflation. The Executive Order, which was first announced on President Biden's second day in office, follows (and supersedes inconsistent provisions of) Executive Order 13658 (EO 13658) issued in 2014 by the Obama Administration.