RE: Public Comments on RIN 1235-AA41 – Increasing the Minimum Wage for Federal Contractors
August 26, 2021
Division of Regulations, Legislation, and Interpretation
Wage and Hour Division
U.S. Department of Labor
200 Constitution Avenue NW
Washington, D.C. 20210
RE: Public Comments on RIN 1235-AA41 – Increasing the Minimum Wage for Federal Contractors
Dear Ms. DeBisschop:
On behalf of The Leadership Conference on Civil and Human Rights, a coalition charged by its diverse membership of more than 220 national organizations to promote and protect the rights of all persons in the United States, thank you for the opportunity to submit comments on the proposed rulemaking to increase the minimum wage for federal contract workers to $15 per hour in 2022 and index it to inflation. The Leadership Conference supports the draft regulations, which promise to improve the lives of more than 300,000 workers, increase equity in the contract system, level the playing field for companies that pay fair wages, and support the efficient use of federal funds.
Raising wages is more than a question of economics. It’s a question of values that forces us to grapple with whether we as a nation value the people who drive our economy — in this case, the workers who support many of the essential functions of the federal government. All jobs supported by federal spending should be good jobs, accessible to Americans from all walks of life, that allow those who hold them to provide for themselves and their families. The draft regulations take concrete steps to raise pay for low-wage contract workers and help to lay the groundwork for future action to improve job quality for millions more workers whose jobs are funded through federal spending.
A $15 per hour wage floor is quickly becoming the norm throughout the country. Nearly 80% of U.S. workers earn at least $15 per hour, compared to only 60% in 2014. Government action contributed to this shift, from President Obama’s 2014 Executive Order 13658 that established a minimum wage for contractors, to the dozens of state, local, and county governments that have raised minimum wage laws to $15 per hour in recent years. A recent report from the National Employment Law Project estimates that 26 million workers have earned more than $150 billion in additional income from a combination of state and local minimum wage increases and the federal contractor minimum wage since 2012, which has supported families and local communities around the United States.
Workers on federal contracts should not be left behind. A minimum wage of $15 is critical to lift contract workers and their families out of poverty. Currently, the federal contractor minimum wage of $10.95 per hour — or $22,776 for a year-round, full-time worker — falls short of the 2020 Census Poverty Threshold for a family of four. The Department of Labor (DOL) estimates that the new threshold would increase wages for more than 327,000 contract workers.
In addition to broadly benefiting federal contractors and their families, implementing this rule would advance President Biden’s promise to utilize federal tools to advance equity. Women and people of color are overrepresented in industries that the federal government contracts out and that in many regions pay very low wages. Women as well as Black and Latino workers are more likely to earn under $15 per hour. An analysis from the Economic Policy Institute estimates that roughly half of workers who will see a raise as a result of implementing this rule will be women and workers of color, and DOL similarly estimates that the biggest beneficiaries will be women, Black and Hispanic workers, as well as younger workers. Furthermore, by extending coverage to workers with disabilities, to contracts performed in Puerto Rico and other U.S. territories, and by ending the subminimum wage for tipped workers by 2024 the proposed rules take a step toward ending longstanding discriminatory practices in federal contracting.
Raising the contractor minimum wage will also improve the system writ large. It will level the playing field between companies that pay fair wages and those that do not, allowing them to compete for quality staffing, reduce turnover, and improve the quality of service provided to the public. And with strong standards, companies that pay higher wages will not be forced to compete against low-road contractors that undercut the market, and will be more likely to engage with the federal government. For example, after Maryland implemented a contractor living standard, the average number of bids for contracts in the state increased by 27 percent.
In order to strengthen the rule further, the Department of Labor must ensure that contractors and workers are fully aware of the wage standard as it applies to their worksites. In addition to the posting suggested by the proposed rules, there should be opportunities to fully educate employers on their responsibilities and workers on their rights. The anti-retaliation language in the proposed rules is important to protect workers’ ability to make claims of wage violations.
Finally, raising the contractor minimum wage is not the only action needed to support shared prosperity in the federal contracting system and guarantee responsible use of public contracting dollars. We thank President Biden for additional actions underway to raise standards for contract workers — such as updating prevailing wage standards for the 21st century and rebuilding agency capacity to enforce these critical laws. The Leadership Conference applauds the Department of Labor for offering thorough draft regulations and strongly supports their implementation to raise standards for contract workers earning poverty wages. When President Biden announced Executive Order 14026 this spring, he stated that “no one should work full-time and still live in poverty.” The draft regulations represent an important step towards fulfilling this commitment to working people.
Thank you for your attention to these comments. If you have any questions, please contact Gaylynn Burroughs, senior policy counsel, at [email protected].
Interim President & CEO
Interim Executive Vice President of Government Affairs
 See, for example, Karla Walter and Anastasia Christman, “Service Contract Workers Deserve Good Jobs,” (Washington, D.C.: Center for American Progress, 2021) available at https://www.americanprogressaction.org/issues/economy/reports/2021/04/09/179997/service-contract-workers-deserve-good-jobs.
 The Washington Post, “For first time, average pay for supermarket and restaurant workers tops $15 an hour,” available at https://www.washingtonpost.com/business/2021/08/08/fifteen-dollar-wage/ (last accessed August 13, 2021).
 Department of Labor, “Fact Sheet: Final Rule to Implement Executive Order 13658, Establishing a Minimum Wage For Contractors,” available at https://www.dol.gov/agencies/whd/government-contracts/minimum-wage/fact-sheet (last accessed July 2021).
 National Employment Law Project, “Local Living Wage Laws and Coverage,” available at https://www.nelp.org/wp-content/uploads/2015/03/LocalLWLawsCoverageFINAL.pdf (last accessed July 2021).
 Yannet Lathrop, T. William Lester, and Mathew Wilson, “Quantifying the Impact of The Fight for $15: $150 Billion in Raises for 26 Million Workers, with $76 Billion Going to Workers of Color,” (New York, NY: National Employment Law Project, 2021) available at https://www.nelp.org/publication/quantifying-the-impact-of-the-fight-for-15-150-billion-in-raises-for-26-million-workers-with-76-billion-going-to-workers-of-color/.
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 Ben Zipperer and Heidi Shierholz, “Up to 390,000 federal contractors will see a raise under the Biden-Harris executive order,” (Washington, D.C.: Economic Policy Institute, 2021) available at https://www.epi.org/blog/up-to-390000-federal-contractors-will-see-a-raise-under-the-biden-harris-executive-order/; Department of Labor analysis of CPS data, Table 7 of WHD-2021-0004-0001.
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