Executive Order Establishes New Minimum Wage For Government Contractors

Kayla Moreland , May 14, 2015

Last month, the Department of Labor (DOL) announced a Final Rule that is expected to affect nearly 200,000 workers.  Under the Final Rule, which implements President Obama’s Executive Order 13658, the minimum wage for workers on government contracts will be raised to $10.10 an hour beginning on January 1, 2015.  Beginning January 1, 2016, the Secretary of Labor will determine the minimum wage amount in accordance with the Executive Order. The new minimum wage will extend to certain employees working on or “in connection with” covered federal construction and service contracts, with the expectation that the raise will increase overall productivity by boosting morale and reducing turnover.

What contracts are covered?

The new minimum wage applies to service contracts covered by the Service Contract Act (SCA), construction contracts covered by the Davis-Bacon Act (DBA), contracts for services on federal property for federal employees or the general public, and concessions contracts (contracts to provide food, lodging, and souvenirs).

Which workers are affected?

Workers who work directly on the contracts described above that are not exempt under the FLSA, the SCA, or the DBA will be entitled to the new minimum wage, as well as workers performing “in connection with” the covered contracts (for example, workers that perform duties necessary to the performance of the contract).

Source: Bennet Alsher, Department of Labor Publishes Final Rule to Raise Minimum Wage for Certain Federal Contractors and Subcontractors, Oct. 29, 2014  http://www.jdsupra.com/legalnews/department-of-labor-publishes-final-rule-73632/
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