Biden's $15 minimum wage hike for federal agencies goes into effect

Agencies are expected to implement the higher wage by Jan. 30

Federal agencies are being directed to raise the minimum wage for government employees to $15 an hour, according to new guidance from the Office of Personnel Management.

The directive will affect nearly 70,000 federal workers, most of whom work at the Departments of Defense, Agriculture and Veteran Affairs, OPM said in a statement on Friday. The new minimum wage applies to all executive branch agencies, except the U.S. Postal Service and Postal Regulatory Commission. 


Agencies are expected to implement the higher wage by Jan. 30. There are 2.2 million federal workers, a majority of whom already earn $15 an hour. There are 2.2 million federal workers, the largest share – 56,000 – who don't yet earn $15 an hour work at the Department of Defense, according to the memo.  

(Photo by Timothy A. Clary-Pool/Getty Images)

NEW YORK, NEW YORK - SEPTEMBER 21: U.S. President Joe Biden addresses the 76th Session of the U.N. General Assembly on September 21, 2021 at U.N. headquarters in New York City. ((Photo by Timothy A. Clary-Pool/Getty Images) / Getty Images)

"Raising pay rates across the federal government to a minimum of $15 per hour reflects our appreciation for the federal workforce and our values as a nation," Kiran Ahuja, director of the Office of Personnel Management, said in the statement.

The rule comes after President Biden signed an executive order in April raising the minimum wage for federal contractors from $10.95 an hour. The minimum wage will continue to be indexed to inflation in the coming years so that the pay reflects changes in the cost of living. 

Biden's executive order also eliminated the tipped minimum wage for federal contractors by 2024, requiring those workers to earn the same $15 minimum wage as other employees. 

"Raising the minimum wage enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs," the White Houses said in April.

Activists appeal for a $15 minimum wage near the Capitol in Washington, Thursday, Feb. 25, 2021. ((AP Photo/J. Scott Applewhite))

Democrats have pushed for legislation that would raise the federal minimum wage to $15 per hour by 2025, but have failed to move it through Congress. 

recent analysis published by the Congressional Budget Office, a nonpartisan agency, found that as many as 3.7 million workers could lose their jobs as a result of the minimum wage increase. At the same time, the CBO projects that some 17 million workers would receive a pay boost.


The federal minimum wage has not increased in more than a decade, although a growing number of states have voted to adopt their own wage increases. There are 29 states with wages above the federal minimum wage, according to the National Conference of State Legislatures. At $15 an hour, California currently has the highest minimum wage in the nation.