Federal Contractors to Earn at Least $15 an Hour

The U.S. minimum wage lift will cover more than 300,000 workers.

November 24, 2021

US Money

ALEXANDRIA, Va.—Federal contractors will be making at least $15 an hour starting Jan. 30, 2022, reports the New York Times. A final rule by the Department of Labor raises the minimum wage for federal contractors to $15 an hour, up from $10.95 an hour, and is scheduled to raise it to $11.25 on Jan. 1.

The raise will affect over 300,000 workers, according to Biden Administration estimates. An estimated five million people work for employers that have federal contracts, including security guards, food workers, janitors and call center workers, but most already make more than $15 per hour.

The raise was announced in April 2021 by President Biden when he signed an executive order directing the labor department to issue it. Biden’s announcement came amid a series of pro-labor moves by the administration.

The federal minimum wage is $7.25, though many cities and states have minimum wages above the federal minimum. The House of Representatives has passed a bill to raise the federal minimum to $15 per hour by 2025, but the legislation has not advanced in the Senate.

Convenience retailers are also raising wages to stay competitive. Rutter’s and Sheetz both raised their starting pay this year, and Wawa, Casey’s and many other retailers offer hiring bonuses. In 2020, the average full-time associate starting wage at a convenience store was $11.89 an hour, which was up 40.5% in the past 10 years, according to the NACS State of the Industry Compensation Report® of 2020 Data.

Retailers also pay above the minimum wage to attract talent in a tight labor market. Walmart pays on average $16.40 in the U.S. Target’s minimum wage is $15 an hour, and it is paying its team members an extra $2 an hour if they work on a Saturday or Sunday between Nov. 20 and Dec. 19, as well as Friday, Dec. 24 and Sunday, Dec. 26.  Starbucks also announced it will raise wages at least twice next year, which would bring its starting pay to $15 an hour by next summer and its average pay to $17.

To help convenience retailers attract and retain top-notch people, NACS partnered with the nonprofit Good Jobs Institute in January 2020 to bring the Good Jobs Strategy to the industry.

Retailers can access the Good Jobs Calculator, designed exclusively for NACS and the convenience industry. This tool allows retailers to use their own data and customized assumptions about the amount of improvement or uplift achievable, and executives can run scenarios on the bottom-line impact of a Good Jobs system.

A recent NACS webinar explored how retailers can attract and hire team members today and in the future. From virtual hiring to job shadowing, retailers are employing a host of ways to find and connect with potential workers.

Look for “Understanding Your Local Labor Landscape” in the just-published December issue of NACS Magazine for tips on building an effective employee value proposition and how to gain an edge when competing for candidates.