In an earlier blog post, we discussed President Obama’s declaration during the State of the Union Address concerning a minimum wage increase for workers performing on new Federal services and construction contracts. A new Executive Order shows that the proposed increase is now officially in the works.
Executive Order 13658 (“Establishing a Minimum Wage for Contractors”) – signed by the President in February and implemented on June 17, 2014 – proposes to raise the minimum hourly wage on certain Government contracts to $10.10 per hour. The increase could take effect as early as January 1, 2015.
According to the Executive Order itself, the new wage will have a positive effect on the Government’s procurement interests and promote “adequate compensation” for those working on Government contracts. That said, and as we previously indicated, the proposed increase is still subject to challenge by employers and private interests groups likely arguing that the new wage will actually have a chilling effect on job creation. So, stay tuned.