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The 5 Biggest Takeaways for Employers from the 2014 State of the Union Address

Shortly after declaring 2014 the “Year of Action,” President Barack Obama delivered a State of the Union address suggesting stronger use of executive power to advance the administration’s policies.

While this means different things to the general American public, what is the potential impact on employers, specifically? Let’s take a closer look at the key issues from the recent State of the Union address most likely to affect employers:

1. Higher minimum wage for federal workers

Obama announced that he will sign an Executive Order raising the minimum wage for workers under new federal contracts. This executive decision would boost the federal minimum wage from $7.25 an hour to $10.10 an hour, affecting thousands of employees entering into future contracts with the federal government.

“In the coming weeks, I will issue an Executive Order requiring federal contractors to pay their federally funded employees a fair wage of at least $10.10 an hour – because if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty,” said Obama.

2. Increased minimum wage for all workers

Right after announcing a boost in the minimum wage for federal contract workers the president shared his plea to Congress to raise the minimum wage for all workers to $10.10 an hour.

“Ten-ten, that’s pretty easy to remember. I am going to call this the 1010 Act, and Congress needs to pass it this year. So, join the rest of the country and say yes. Let’s give America a raise,” said Obama.

A minimum wage hike for all Americans is one of the more debated items on Obama’s agenda, with opponents suggesting it would hurt businesses and stunt job growth. Proponents, on the other hand, are concerned that the current minimum wage hasn’t kept pace with inflation and that it perpetuates income inequality.

Toward his goal of a more sweeping minimum wage change, Obama urged state and local government leaders to raise the minimum wage, pointing out five states that have approved minimum wage increases since January 2013.

3. Unemployment insurance

In addition to urging congressional leaders to reform the nation’s unemployment insurance system and extend jobless benefits to unemployed workers, Obama announced a White House initiative to expand job opportunities for the long-term unemployed.

“I've been urging CEOs to give more long-term unemployed workers a fair shot at that new job and a new chance to support their families,” said Obama.

4. Equal pay for women

Obama expressed a renewed commitment to fair and employee-friendly workplace regulations, emphasizing his desire for additional action regarding equal pay for women and flexible workplace policies for parents.

He called the pay difference between men and women an “embarrassment” and pointed out that, “… today, women make up about half our workplace. But they still make 77 cents for every dollar a male earns. That is wrong.”

5. Immigration reform

Underscoring the need to “fix our broken immigration system” in 2014, Obama encouraged Congress to cooperate in developing a comprehensive, bipartisan bill paving the way for citizenship for the nation’s estimated 11 million illegal immigrants.

"When people come here to fulfill their dreams – to study, invent, and contribute to our culture – they make our country a more attractive place for businesses to locate and create jobs for everyone," said Obama. 

Podium to Policy … Poised for What’s Next

While it is too soon to know how the President’s initiatives, as outlined in the State of the Union address, may impact the nation, we’ll be keeping a watchful eye on any new developments in the coming months. If 2014 is a “Year of Action,” as promised, employers will most certainly be affected in terms of policies and practice.