Posted on / Updated on / in Compensation Planning & Federal Contractors & HR Strategy & Human Resources /

What Does the Federal Wage Increase Mean for You?

Due to two separate Executive Orders (Obama-EO 13658 and Biden-EO 14026) minimum wage for federal employees will be on the rise in 2022.

When these changes take effect:

January 1, 2022: Minimum wage for federal contract employees raises to $11.90 per hour

January 30, 2022: Minimum wage for any new, renewed or extended federal contracts raises to $15.00 per hour

What you need to know:

  • If you have hourly employees that work on or in connection with federal contracts, this applies to you.
  • The federal contracts include any agreement (subcontract, permit, license, etc.) between the U.S. government and private sector businesses
  • There is talk of the orders putting pressure on Congress to raise private sector minimum wages as well.

So, how do you prepare to raise your base pay?

Start with a compensation plan! Compensation plans include benchmarks of salary ranges, benefits, bonuses, and more. They compare similar positions in your market and can help you create a competitive benefits package. The wage range benchmarks provided can help you determine differentiated pay scales as you look at raising your base pay.

If you are unsure if the Executive Orders apply to your business, consider an HR Review! An Integrity HR Review includes an audit of your compensation and benefits, as well as your legislative compliance. We even review your culture, recruitment, and overall HR strategy to help your business succeed!

Do you have questions about minimum wage or how to start a customized compensation plan? Contact us! We’re here to help!

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Integrity HR's human resources blog is filled with expert advice (and sassy commentary) on those everyday employment issues that give business owners and managers HR headaches. From tips on how to retain key employees to how to write your dress code policy, our blog has all the HR resources you need.