HR Management & Compliance

DOL Releases Official Proposal to Raise Federal Contractor Minimum Wage to $10.10

U.S. Labor Secretary Thomas E. Perez released a proposed rule to raise the minimum wage for federal contractor employees on new contracts to $10.10 on June 12. President Obama directed the U.S. Department of Labor to issue the rule in February.

The rule provides guidance and sets standards for employers for contractor employees, and it includes information about coverage for tipped workers and workers with disabilities. Additionally, the rule establishes an enforcement process similar to existing rules.

Obama signed Executive Order 13658 on Feb. 12, 2014, directing the Secretary of Labor to issue regulations by Oct. 1, 2014. The rule as proposed increases the hourly minimum wage for contractor workers to $10.10 per hour beginning Jan. 1, 2015, and increases it annually thereafter by an amount determined by the Labor Secretary , beginning Jan. 1, 2016.

The increase applies to new federal government contracts and replacements for expiring federal contracts that are the result of solicitations issued on or after the Jan. 1, 2015 deadline, as well as on contracts awarded outside the solicitation process on or after that date.

The publication of the proposed rule in the Federal Register – presumably in the next few days – will trigger a 30-day comment period.

DOL estimated that nearly 200,000 workers will benefit from the wage increase.

The order was part of a wave of executive actions the president took around wages. The other actions included proposals to update DOL’s overtime regulations and increase wage transparency.

For additional analysis of the administration’s contractor minimum wage increase and details about the administration’s other executive actions, along with in-depth information about Fair Labor Standards Act compliance, go to http://hr.complianceexpert.com/.