September 21, 2015
On September 16, the U.S. Department of Labor’s Wage and Hour Division (WHD) published a notice in the Federal Register announcing a new minimum wage rate of $10.15 for direct federal contracts and subcontracts covered by Executive Order 13658. Federally assisted contracts are not affected. The rate goes into effect on January 1, 2016.
Executive Order 13658 was signed by President Obama in 2014, and its corresponding regulations implemented an hourly minimum wage for workers performing work on covered federal contracts of $10.10 per hour beginning on January 1, 2015. The order mandated that the Secretary of Labor determine a new minimum wage annually, based on the annual percentage increase in the Consumer Price Index for urban wage and clerical workers. Notice is required to the public at least 90 days before the new wage goes into effect each year.
Impacted workers include those whose wages are governed by the Davis-Bacon Act , the Service Contract Act, and non-exempt workers whose wages are governed by the Fair Labor Standards Act (FLSA) for all time spent directly supporting a covered contract. FLSA-covered workers who do not spend at least 20% of the workweek directly supporting a covered contract are excluded.
Covered contractors with existing projects or awards are entitled to an adjustment by federal agencies if the annual inflation increase was not covered by the existing contract or award.
For more information on Executive Order13658 including AGC’s impact on the final rule, click here.