Federal contractor minimum wage will rise to $10.60 in 2019
- Companies doing business with the federal government must pay their employees who work on or in connection with covered contracts $10.60 an hour, effective Jan. 1, 2019, the U.S. Department of Labor's (DOL) Wage and Hour Division announced Sept. 4.
- Executive Order 13658, signed by former President Obama in 2014, initially set the rate at $10.10 but also called for annual increases as specified by the secretary of labor. The secretary must announce a minimum-wage increase 90 days before the effective date.
- The current contractor minimum wage of $10.35 took effect Jan. 1, 2018. Additionally, the minimum contractor cash wage for tipped employees will increase from $7.25 to $7.40 per hour.
The Trump administration made good on many deregulation promises, rolling back the overtime rule, EEO-1 compensation reporting requirements, and even some federal contractor mandates. But E.O. 13658 remains and employers doing business with the federal government will have to be in compliance come Jan. 1.
Just days before DOL announced this increase, President Donald Trump told lawmakers that he wants to halt pay raises for civilian federal workers. He said that the federal budget can't support wage increases, which he called "inappropriate" for these workers, according to CNN. Civilian federal workers expected a 2.1% increase across the board, plus regional pay adjustments, on Jan. 1.
Workers in the private sector, on the other hand, will see a estimated 3.1% increase next year, experts predict. This uptick in pay comes after a long stretch of stagnation. Employers seemed reluctant to raise wages, even after recent changes to the tax code that were generally considered favorable to business. Not yet confident in the economy, many employers instead opted for one-time bonuses to attract and retain workers. Others have been focused on paid leave, flexibility and other benefits, but it appears that companies may once again be ready to compete on wages, which workers still cite as their top priority.
- U.S. Labor Department Worker Rights under Executive Order 13658