January 30 is the official beginning date for a minimum wage increase in all new federal contracts or contract extensions, rising from the current $10.95 to $15.00 per hour, as implemented by the Department of Labor.
But for some contractors, asserts the Associated Builders and Contractors, that increase may prove problematic.
In a statement, Ben Brubeck, vice president of regulatory, labor and state affairs for the group, noted that most ABC federal contractor members are already paying up to and more than the $15 per hour rate.
But, Brubeck continued, the new rule coming out of Washington fails to establish a “market-driven approach to wage determination.”
Brubeck added that the Labor Department’s decision will also “create unnecessary confusion.”
According to sources, the wage increase is expected to apply to around 327,000 workers. In a statement, Martin Walsh, the Secretary of Labor, said the wage increase will improve the “economic security of these workers and their families, many of whom are women and people of color.”
Administration officials, notes the New York Times, do not expect the wage increase to result in “significant job losses or cost increases, contending that the higher wage would improve productivity and reduce turnover, providing employers and the government with greater value.”
The rise does not apply to federal contracts executed before the January 30 implementation date. The Labor Department has additionally announced that any future wage increases will first be published a minimum of 90 days become becoming effective.
The wage increase, which will be indexed to inflation, is the result of an executive order signed by President Biden earlier this year.
By Garry Boulard
