Final Rule For Establishing a Minimum Wage for Contractors Implemented
FINAL RULE TO IMPLEMENT EXECUTIVE ORDER 13658, ESTABLISHING A MINIMUM HOURLY WAGE OF $10.10 FOR CONTRACTORS
On February 12, 2014, President Obama signed Executive Order 13658, “Establishing a Minimum Wage for Contractors,” to raise the minimum wage to $10.10 for all workers on Federal construction and service contracts.
The Department has published a final rule to implement the provisions of Executive Order 13658. The final rule issued by Secretary of Labor Tom Perez is an important milestone in raising the minimum wage for workers on Federal contracts. The final rule will protect the right of workers and increase the hourly minimum wage to $10.10. This final rule requirement applies to all contracts for construction covered by the Davis-Bacon Act; contracts for services covered by the Service Contract Act; concessions contracts on Federal property; and contracts to provide services, such as child care or dry cleaning, in Federal buildings for Federal employees or the general public.
Approximately 200,000 workers will benefit from this Executive Order.
Executive Order 13658 applies to new contracts and replacements for expiring contracts with the Federal Government that result from solicitations issued on or after January 1, 2015 or to contracts that are awarded outside the solicitation process on or after January 1, 2015.
Executive Order 13658 applies to four major categories of contractual agreements:
- 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 at 29 CFR 4.133(b); and
- Contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.
Procurement Contracts for Construction
Under the final rule, any contract covered by the DBA and its implementing regulations is subject to the Executive Order minimum wage requirement. The Executive Order does not apply, however, to contracts that are subject only to the Davis-Bacon Related Acts.
Both procurement and non-procurement contracts that are subject to the SCA and its implementing regulations are subject to the Executive Order minimum wage requirement.