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Minimum wage for workers on new federal contracts will rise to $15 starting Jan. 30

Labor activists hold a rally in support of a national $15 minimum wage on May 19, 2021, in Washington, D.C.

Kevin Dietsch | Getty Images News | Getty Images

Federal contractors will be guaranteed an hourly minimum wage of at least $15 in all new contracts with government agencies beginning on Jan. 30, 2022, the U.S. Department of Labor announced on Monday.

President Joe Biden had signed the executive order lifting the hourly rate for federal contractors from $10.95 in April. The change is expected to impact some 327,000 workers, including food-service employees and nursing assistants who currently make less than $15 an hour.

The order will also lead to the end of the tipped minimum wage for federal contractors, which is now $7.65 an hour, by 2024.

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Many workers will have to wait longer than January for the pay bump, however. The increased wage is a requirement only in new contracts, and therefore won’t apply to workers on existing federal agreements, which can be three years or five years long.

Still, officials at the Labor Department celebrated the raise on a call with reporters on Monday.

“It’s a step in the right direction,” said Jessica Looman, acting administrator of the Department of Labor’s Wage and Hour Division.

“Bottom line, we really want to make sure we’re leveraging the purchasing power of the federal government to ensure fair wages for workers across the country and in the territories.”

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