February 4, 2022 •
News
Hourly Minimum Wage for Certain Federal Contractors Increased to $15
The U.S. Department of Labor (USDOL) Wage and Hour Division (WHD) published its Field Assistance Bulletin No. 2022-1 (FAB) which clarified Executive Order 14026 (EO 14026) minimum wage requirements for:
- New federal contracts entered into or after January 30, 2022 (unless the solicitation was issued before January 30, 2022 and the contract was entered into between January 30, 2022 and March 30, 2022), and
- Contracts that are renewed, extended or an option in the contract is exercised after January 30, 2022.
Generally, the following four types of contracts are covered by the EO 14026:
- Davis-Bacon Act contracts
- Service Contract Act contracts
- Concession contracts; and
- Contracts entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.
The initial minimum hourly wage for employees who are working on a covered contract is $15.00 ($10.50 for tipped workers; however, contractors must increase the cash wage paid if the worker does not receive enough tips in the workweek to equal the minimum wage rate.
Other important details of FAB 2022-1:
- The geographic scope of the application of EO 14026 includes all 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf lands, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Wake Island, and Johnston Island.
- Contractors must notify all workers performing work on a covered contract of the applicable EO 14026 minimum wage rate by either posting the applicable wage determination under the SCA or DBA contract or posting the WHD Executive Order poster (which is not yet available).
- Contractors who subcontract covered work must incorporate the flow down clauses into contracts with their subcontractors.
- Contractors must maintain records that segregate non-covered work from work performed under the covered contract. Without any affirmative proof, all hours worked will be presumed to have been worked on the covered contracts which are subject to the EO 14026 minimum wage.
Certain exclusions to EO 14026 may apply. More information can be found at Field Assistance Bulletin: 2022-1 (dol.gov).
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