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executive action

Biden to raise minimum wage to $15 an hour for federal contractors

President Biden is set to sign an executive order to raise the minimum wage for federal contractors, the White House has announced.

Biden's order will require that federal contractors be paid a minimum of $15 an hour, an increase from $10.95 an hour, officials said. The order will set a deadline of Jan. 30, 2022 for agencies to incorporate this wage into new contract solicitations, according to the White House, as well as a deadline of March 30, 2022, to implement it into new contracts.

The White House also said the executive order will ensure that "tipped employees working on federal contracts will earn the same minimum wage as other employees on federal contracts," eliminating the "tipped minimum wage" for these federal contractors by 2024. This will affect "hundreds of thousands" of federal contractors, the White House said, although a senior administration official noted to NBC the exact number who will benefit is not "static" because "federal contracts are not static, and it will take time to phase it in into new contracts." Former President Barack Obama previously signed an executive order raising the minimum wage for federal contractors in 2014.

"As a result of raising the minimum wage, the federal government's work will be done better and faster," the White House said. "At the same time, the executive order ensures that hundreds of thousands of workers no longer have to work full time and still live in poverty."

This comes after an effort by Democrats to raise the federal minimum wage to $15 an hour came to a halt in the Senate, CNN notes. The Senate parliamentarian in February ruled that Democrats could not include a minimum wage increase to $15 an hour in their COVID-19 relief package under budget reconciliation rules. The White House at the time said that Biden was "disappointed in this outcome," but "respects the parliamentarian's decision."