Facebook raises minimum pay for contractors to $15 per hour

By Yasmeen Abutaleb

NEW YORK (Reuters) - Facebook (FB.O) raised wages for its contract workers, such as cafeteria staff and janitors, to a minimum of $15 per hour amid rising tension over the wage gap between the technology sector's elite and the lower-paid workers.

Contractors will also receive a minimum of 15 days of paid vacation days and a $4,000 new child benefit for parents who do not receive parental leave, Chief Operating Officer Sheryl Sandberg said in a Wednesday post on Facebook.

"Taking these steps is the right thing to do for our business and our community," Sandberg wrote.

Facebook implemented the wage increase for some workers at its Menlo Park headquarters as of May 1. It will work to expand the policy within the year to its substantial vendors, who have more than 25 employees and are based in the United States, she said.

The company declined to say how many contract workers it employs or name any of its vendors. It initially had planned to announce the change on May 1, when Sandberg's husband, SurveyMonkey CEO Dave Goldberg, died unexpectedly during an exercise accident.

As debates rage in Congress and state legislatures over whether to raise minimum wages and help mitigate a growing income gap, several corporations have taken steps to improve compensation for service workers, including Walmart, Costco (COST.O) and Starbucks (SBUX.O).

Facebook's announcement drew praise from the White House, unions and family groups.

"Corporate America is beginning to step forward to adopt these policies – in Facebook’s case, by saying the company won’t be party to poverty wages and practices that force workers to choose between job and family," Debra Ness, president of the National Partnership for Women and Families, said in a statement.

Silicon Valley has come under increasing pressure to close the income gap given California's high cost of living, the sixth most expensive in the country in 2014, according to data from the Missouri Economic Research and Information Centre.

Google (GOOGL.O) took similar steps last year when it raised the minimum pay to $15 per hour for its service workers, including bus drivers, parking attendants, security guards and cafe workers in Northern California offices. It also expanded health care coverage to all service workers on U.S. Google campuses.

(Editing by Dina Kyriakidou and David Gregorio)