Executive Order 13658-Establishing a Minimum Wage for Contractors
Issued 2014-02-12 by Barack Obama
Plain-English Overview
AI-generated summary explaining what this action does, who it affects, and why it matters
In February 2014, President Obama issued an executive order raising the minimum wage to $10.10 per hour for workers employed by companies that have contracts with the federal government. The order requires federal agencies to include this wage requirement in new contracts and contract-like agreements, and contractors must pass this requirement down to their subcontractors as a condition of payment. Starting in 2016, this minimum wage would increase annually based on inflation, specifically tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers.
This order affects workers performing jobs under federal contracts, including those who receive special wage certificates under existing law. For tipped employees covered by the order, the required cash wage starts lower but gradually increases until it reaches 70 percent of the regular contractor minimum wage. The order does not override any state, local, or other federal laws that set higher minimum wages—those higher standards still apply.
The stated purpose is to improve efficiency and cost savings in government contracting. The order argues that paying workers higher wages increases their morale, productivity, and work quality while reducing employee turnover and the costs associated with it. The President based this action on his constitutional authority and the Federal Property and Administrative Services Act, which governs federal procurement.
AI-generated summary for educational purposes
Constitutional Analysis
How this action fits (or doesn't) within Article II authority and existing law
Executive Order 13658 ("Executive Order 13658-Establishing a Minimum Wage for Contractors") restructures or establishes federal entities. The stated purpose: "promote economy and efficiency in procurement by contracting with sources who adequately compensate their workers, it is hereby ordered as follows: Section 1 ." The President has authority to manage the executive branch under Article II, including creating task forces, councils, and working groups within the White House. However, creating independent agencies with binding regulatory authority, or fundamentally restructuring congressionally created departments, typically requires legislative authorization.
The Reorganization Act historically provided a framework for executive reorganization subject to congressional review. Current reorganization authority is more limited. The constitutionality depends on whether this order creates White House advisory bodies (acceptable) or attempts to restructure agencies in ways that conflict with their enabling statutes (questionable).
Official Summary
Administration of Barack Obama, 2014 Executive Order 13658—Establishing a Minimum Wage for Contractors February 12, 2014 By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq ., and in order to promote economy and efficiency in procurement by contracting with sources who adequately compensate their workers, it is hereby ordered as follows: Section 1 . Policy . This order seeks to increase efficiency and cost savings in the work performed by parties who contract with the Federal Government by increasing to $10.10 the hourly minimum wage paid by those contractors. Raising the pay of low-wage workers increases their morale and the productivity and quality of their work, lowers turnover and its accompanying costs, and reduces supervisory costs. These savings and quality improvements will lead to improved economy and efficiency in Government procurement. Sec. 2 . Establishing a minimum wage for Federal contractors and subcontractors . (a) Executive departments and agencies (agencies)