President Obama signed an executive order raising the minimum wage for federal contract workers for all federal contracts beginning on or after January 1, 2015. The new minimum wage will be $10.10 per hour, up from $7.25 per hour.
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Get Your Report Now!Obama had indicated in his recent State of the Union speech that this action was imminent. The increase does not affect employers under current contracts, but only applies to new contracts and replacement contracts for those that are expiring.
Tipped workers. The executive order also applies to tipped workers, so that they will earn at least $10.10 through a combination of employer contributions and tips. The hourly cash wage that employers must pay to tipped workers will be at least $4.90 per hour, and will increase by 95 cents per year until it is 70 percent of the minimum wage.
Workers with disabilities. Workers with disabilities who earn less than the minimum wage because of productivity wage scales will be included as well. Currently, individuals whose productivity is affected by a mental or physical disability may be paid a subminimum wage pending receipt of a certificate from the Secretary of Labor. The Executive Order states that workers covered by service or concessions contracts must earn $10.10 per hour as well.
In Obama’s words. According to President Obama, "It's the right thing to do. But what's more, companies have found that when their employees earn more, they're more motivated, they work harder, and they stick around longer. You should expect the same of your federal government. The bottom line is this: We are a nation that believes in rewarding honest work with honest wages. And America deserves a raise."