On September 20, 2016, the Department of Labor published a Notice with the Federal Register announcing that the Federal Contractor Minimum Wage would increase to $10.20 for non-tipped employees on January 1, 2017. This falls on the heels of similar five cent an hour increases over the past three years. Federal contractor tipped workers minimum wage will increase to $6.80 hour on the same date.The governing Executive Order 13658 permits the Secretary of Labor to adjust rates annually.
The federal contractor minimum wage is paid to workers who perform work on contracts covered by Executive Order 13658 which include:
- procurement contracts for construction covered by the Davis-Bacon Act (DBA);
- service contracts covered by the Service Contract Act (SCA);
- concessions contracts, including any concessions contract excluded from the SCA by the Department of Labor’s regulations;
- contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.
Workers are entitled to federal contractor minimum wage for the period of time they spend working on qualified contracts as outlined above. The Executive Order does contain a few exclusions for certain workers. According to the Department of labor, exclusions apply to, “workers who are employed in a bona fide executive, administrative, or professional capacity and who consequently are exempt from the FLSA’s minimum wage and overtime requirements are not entitled to receive the Executive Order minimum wage. FLSA-covered workers performing ‘in connection with’ covered contracts are also excluded from coverage of the Executive Order if they spend less than 20% of their work hours in a particular workweek performing in connection with covered contracts.”
The Federal Contractor Minimum Wage must be paid to workers performing work on or in conjunction with covered contracts and applies to new contracts and replacement for expiring contracts with the federal government that result from solicitations on or after January 1, 2015.
A mandatory posting notice for all federal contractors is currently available. Also, plan ahead for all of your 2017 labor law compliance needs and visit us at Labor Law Center.
