President Barack Obama will sign an executive order Wednesday afternoon raising the minimum wage for federal contract workers to $10.10 an hour. The order will do for hundreds of thousands what congressional Republicans are refusing to do for millions more Americans currently working at the poverty-level federal minimum wage of $7.25. Since the executive order only governs future contracts, current workers won't see a raise, at least until the contracts they work under are renewed or revised. But the order covers some groups often left out of improvements in minimum wage law; according to a White House release, it:
Obama is also using the signing of this raise for federal workers to push Congress to do the same for the overall federal minimum wage; the White House notes that "Last year alone, workers earning the minimum wage basically got the equivalent of a $200 pay cut because the minimum wage stayed the same while the cost of living went up." But Republicans in Congress continue to block action on a minimum wage increase, despite strong popular support.
- Includes an increase in the tipped minimum wage. This executive order also includes provisions to make sure that tipped workers earn at least $10.10 overall, through a combination of tips and an employer contribution. Employers are currently required to pay a minimum base wage of $2.13 per hour, a base that has remained unchanged for over twenty years, and if a worker’s tips do not add up to the minimum wage, the employer must make up the difference. Under the Executive Order, employers are required to ensure that tipped workers earn at least $10.10 an hour. The Executive Order requires that employers pay a minimum base wage of $4.90 for new contracts and replacements for expiring contracts put out for bid after January 1, 2015. That amount increases by 95 cents per year until it reaches 70 percent of the regular minimum wage, and if a worker’s tips do not add up to at least $10.10, the employer will be required to pay the difference.
- Covers individuals with disabilities. Under current law, workers whose productivity is affected because of their disabilities may be paid less than the wage paid to others doing the same job under certain specialized certificate programs. Under this Executive Order, all individuals working under service or concessions contracts with the federal government will be covered by the same $10.10 per hour minimum wage protections.