Minimum Wage Required by Federal Contractors Increases for 2023 - State and Federal Communications

January 6, 2023  •  

Minimum Wage Required by Federal Contractors Increases for 2023

Pres. Biden - by: Gage Skidmore

For 2023, the minimum wage required to be paid by US Federal Contractors under Executive Order 14026 increases to $16.20 an hour.

Beginning January 30, 2022, all federal agencies were required to incorporate a $15 minimum wage in new contract solicitations pursuant to an executive order signed by President Joseph R. Biden on April 27, 2021.

The order requires federal contractors to pay a minimum wage for employees working on or in connection with a federal government contract.

Tipped employees performing work on or in connection with contracts covered by Executive Order 14026 must be paid a minimum cash wage of $13.75 per hour.

Contractors and subcontractors must certify they meet this condition requiring the minimum wage. This certification is a condition of payment to the contractors from the government. The order does not apply to grants; contracts, contract-like instruments, or certain specific type of agreements with Indian Tribes.

For 2023, tipped workers received 85% of the wage rate in effect for non-tipped employees, rounded to the nearest multiple of $0.05. Beginning January 1, 2024, and for each subsequent year, tipped workers must receive 100% of the wage received by non-tipped workers, eliminating the difference between the type of workers. Adjustments must be considered by employers of tipped workers who do not receive a sufficient additional amount on account of tips to equal to the minimum wage of non-tipped workers.

If a state or municipality has a higher minimum wage, the Executive Order does not excuse noncompliance with the laws requiring the higher wage.

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