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White House Announces Minimum Wage for Federal Contract Workers

Wednesday, January 01, 2014

President Barack Obama in his latest State of the Union address announced his plan for an increase in minimum wages for federal contract workers. The plan is already being greeted with great praise by unions and labor activists. However, the plan to increase minimum wages is not as expansive and widespread, as many minimum wage advocates had called for.

During his State of the Union Address, the President announced that he will soon sign an executive order that will establish the minimum wage for federal contract workers at $10.10 an hour. The current federal minimum wage for federal contract workers is $7.25 per hour.

While the plan has been greeted with enthusiasm, it contains several limitations which California employment lawyers find disappointing. The new increases will only go into effect in 2015, at the very earliest. They will also not be effective retroactively, and not affect current federal contracts. Only new contracts that go into effect after 2015 are expected to be affected by the minimum wage increase.

Besides, the increase will only cover approximately 10% of the 2.2 million federal contract workers currently in the country. That's because many of these federal contract workers already are eligible for more than $10.10 an hour, and that means that the new minimum wage will make no difference to their situation at all.

There have been other restrictions and limitations that are disappointing. For instance, the minimum wage order will have no impact on contract renewals, unless there are modifications in the other terms of the agreement, like the type of work. That means that when a contract is renewed, not everybody will be eligible for the $10.10 minimum wage.




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