President Barack Obama signed an Executive Order (EO), which goes into effect on January 1, 2015, to increase the minimum wage for new federal contracts to $10.10 an hour. The higher wage will apply to new contracts and replacements for expiring contracts. Studies show that boosting low wages will reduce turnover and absenteeism, while also boosting morale and improving the incentives for workers, leading to higher productivity overall. These gains improve the quality and efficiency of services provided to the government.

The EO also changes the current law that allows federal contract workers with disabilities to be paid less than those without disabilities who are doing the same job. Under the Order, all federal contractors will be covered by minimum wage protections.