Labor Gets Ready to Raise the Minimum Wage for Federal Contractors

Labor Secretary Thomas Perez Labor Secretary Thomas Perez Connor Radnovich/AP

The Labor Department announced on Thursday it will soon issue regulations to implement the increased minimum wage for federal contractors, following up on a February executive order from President Obama.

Labor Secretary Thomas Perez said the agency’s proposed rule would apply the $10.10 per hour minimum wage to contracts signed on or after Jan. 1, 2015. Perez said the pay boost will not just ensure “anyone doing work on behalf of the American people receives a fair wage,” but improve the private-sector services agencies receive.

“I meet with employers all the time who have raised wages for their workers because they know it reduces turnover and training costs, improves morale and boosts productivity,” Perez wrote in a blog post announcing the notice for the proposed rule.

Obama has been lobbying heavily in recent months for Congress to raise the federal minimum wage to $10.10 per hour for all American workers, but Republicans have so far stymied that effort. The current federal minimum wage is $7.25, and the president does not have unilateral authority to change it.

The proposed rule will apply to four major categories of contracts, Perez said: “service contracts; construction contracts; concessions contracts; and contracts for services provided to federal employees, their dependents or the general public on federal property or lands.”

White House Press Secretary Jay Carney has estimated the executive order will affect “a couple hundred thousand” workers. 

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