Obama signs minimum wage order for federal contract workers

By Don Tagala, ABS-CBN North America Bureau

Posted at Feb 13 2014 03:43 PM | Updated as of Feb 13 2014 11:43 PM

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WASHINGTON, DC – As part of his promise of a year of action to provide opportunities for working Americans, President Barack Obama signed an executive order on Wednesday to raise the minimum wage for federal contract workers to $10.10 an hour beginning next year.

The executive order will benefit hundreds of thousands of workers under contracts with the federal government who are making less than $10.10 an hour.

This will only apply to new contracts and replacements for expiring contracts in 2015.

Studies show that boosting low wages will reduce turnover and absenteeism by boosting morale and improving incentives for workers. The results lead to higher overall productivity and improve the quality and efficiency of services provided to the government.

The executive order also includes provisions to make sure that tipped workers earn at least $10.10 overall.

From a $2.13 minimum base wage for tipped workers, the executive order now requires employers a $4.90 for new contracts.

If a worker’s tips do not add up to at least $10.10 an hour, the employer will be required to pay the difference.

The executive order also covers individuals with disabilities.

With the new executive order, all individuals working under contracts with the federal government will be covered by the same $10.10 per hour minimum wage protections including the disabled workers.

The White House said the President is leading by example, and that he will continue to work with Congress to raise the minimum wage for all Americans to make ends meet.

A new Harkin-Miller bill will be sent to Congress that would raise the federal minimum wage for working Americans in stages to $10.10.

The President will also continue to support and encourage state, local and private sector efforts to increase wages and help more working families.