DOL Issues Final Federal Contractor Minimum Wage Rule

Co-author: Russell R. Bruch

Under Executive Order 13658, covered employees must be paid at least $10.10 per hour starting January 1, 2015.

On October 7, the U.S. Department of Labor (DOL) published in the Federal Register the preamble and final rule regarding Executive Order 13658, which raises the minimum wage to $10.10 per hour for certain federal contract workers.[1] The Executive Order will take effect for new contracts or certain contract modifications on or after January 1, 2015. The preamble and rule provide guidance and set the standards for employers regarding which contracts the Executive Order covers and to which workers the Executive Order is applicable. The final rule also sets forth the obligations that contractors must fulfill to comply with the new minimum wage provisions, including details on notice and recordkeeping obligations.[2] The following summary highlights key provisions announced in the final rule.

When will the new minimum wage requirement take effect?

The Executive Order applies to "new contracts" resulting from a solicitation issued on or after January 1, 2015 or a contract that is awarded outside the solicitation process on or after January 1, 2015. Additionally, for purposes of the Executive Order, "a contract that is entered into prior to January 1, 2015 will constitute a new contract if, through bilateral negotiation, on or after January 1, 2015: (1) The contract is renewed; (2) The contract is extended, unless the extension is made pursuant to a term in the contract as of December 31, 2014 providing for a short-term limited extension; or (3) The contract is amended pursuant to a modification that is outside the scope of the contract."[3]

What contracts does the Executive Order apply to?

The Executive Order applies generally to "any new contract with the Federal Government," provided that the agreement (1) constitutes a "contract or contract-like instrument" as defined in the final rule and (2) qualifies as one of the specifically enumerated types of contracts described in the Executive Order. The four major categories of covered contracts are the following:

Procurement contracts for construction covered by the Davis-Bacon Act (DBA) Service contracts covered by the Service Contract Act (SCA) Concession contracts,[4] including concession contracts excluded from the SCA by the DOL's regulations at 29 C.F.R. § 4.133(b) Contracts in connection with federal property or lands and related to offering services for...