HR Management & Compliance

Final rule on minimum wage for contractors released

by Tammy Binford

Federal contractors can now take a look at the rules they will have to follow when an Executive Order that requires a $10.10 per hour minimum wage for workers on federal service and construction contracts takes effect.

The U.S. Department of Labor (DOL) announced the final rule on October 1. The rule implements Executive Order 13568, which was announced by President Barack Obama in February. The DOL’s announcement said the Executive Order will affect nearly 200,000 workers.

In addition to providing guidance and standards regarding which contracts and employees are covered, the rule establishes obligations contractors must fulfill to comply with the Executive Order, including record-keeping requirements. The rule provides guidance on where to find the required rate of pay for all workers, including tipped employees and workers with disabilities. The rule also establishes an enforcement process.

The Executive Order applies to new contracts and replacements for expiring contracts with the federal government that result from solicitations issued on or after January 1, 2015, as well as to contracts awarded outside the solicitation process on or after January 1, 2015. The new minimum wage will be indexed to inflation in the future.

The DOL’s announcement said the final rule makes clear that the minimum wage requirement applies to all contracts for construction covered by the Davis-Bacon Act; contracts for services covered by the Service Contract Act; concessions contracts such as contracts to furnish food, lodging, automobile fuel, souvenirs, newspaper stands, and recreational equipment; and contracts to provide services such as child care or dry cleaning on federal property for federal employees or the general public.

Information on the new rule, including a fact sheet and frequently asked questions, is available on the DOL’s website.

The final rule comes after the DOL issued a proposed rule on June 17. Comments on the proposed rule were examined before issuance of the final rule, which will be published in the Federal Register on October 7.

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