Federal contractor minimum wage to rise to $15 an hour

Dive Quick:

  • The U.S. Department of Labor introduced Monday a remaining rule implementing President Joe Biden’s executive order elevating the federal contractor least wage from $ten.ninety five to $15 an hour. The remaining rule retains the Jan. thirty, 2022, deadline by which organizations will have to integrate the new charge into new contract solicitations.
  • The necessities apply to federal contractors that accomplish work in all fifty U.S. states as perfectly as U.S. territories, Jessica Looman, performing administrator of DOL’s Wage and Hour Division, stated during a media briefing Monday. It also finishes the idea credit rating as perfectly as the subminimum wage provision for sure employees with disabilities.
  • The new charge does not apply to eligible federal contracts entered into ahead of Jan. thirty, 2022, but will apply to extensions of these kinds of contracts finalized right after the deadline. Commencing Jan. 1, 2023, the least wage will boost annually by an volume established by the Secretary of Labor. Looman stated the agency would before long present steering and academic outreach to contractors on how to put into practice the rule.

Dive Perception:

The legislation’s result on development corporations will most probably be small, as most development corporations that do business with the federal governing administration presently pay back personnel at wage premiums better than the $15 for each hour least established in the rule, said Ben Brubeck, Associated Builders and Contractors vice president of regulatory, labor and point out affairs, in a press statement.

It has been almost four months given that DOL published its proposed rule implementing Govt Order 14026, which Biden issued in April.

Questioned as to whether or not the implementation of the order would guide to too much prices for contracting companies, Looman stated community remarks on the proposal were being “generally very favourable” and that the agency has been in make contact with with the Small Business Administration in producing steering content precisely for tiny companies. She famous that when an agency enters a contract, it will have to pay back for the services supplied.

“We want to make absolutely sure we are leveraging the obtaining energy of the federal governing administration to ensure reasonable wages for personnel,” Looman stated. “Due to the fact we are spending pounds on federal contracts, it actually is our work to ensure wages are reasonable.”

In a tweet Monday, the agency stated much more than 50 % of the personnel benefiting from the wage boost order were being females, whilst twenty five% were being Hispanic and 15% were being Black. Looman stated that whilst the agency did not have a fantastic estimate of all the personnel that may possibly be impacted by the rule, those people in the childcare, cafe and servicing industries would most probably be impacted in states and localities the place least wages experienced not not too long ago enhanced.

Looman also stated the rule could be viewed as a “continuation of the evolution of the federal governing administration using its buying energy to boost wages,” citing previous President Barack Obama’s 2014 executive order — and subsequent remaining rule — elevating the federal contractor least to $ten.ten an hour.

A actuality sheet on the rule famous that sure contracts are excluded from the necessities, together with grants in just the meaning of the Federal Grant and Cooperative Arrangement Act sure procurement contracts for development that are not subject matter to the Davis-Bacon Act and sure contracts for services that are exempted from protection underneath the Support Deal Act or its implementing regs, amid others.

As aspect of the regs, contractors will have to meet up with recognize-and-submitting necessities by, for case in point, submitting the relevant wage determination in a outstanding and accessible place at the worksite, in accordance to the actuality sheet.

Foreseeable future boosts to the least will have to be established by the Secretary of Labor and published at least 90 days ahead of they just take result. The rule additional specifies that these kinds of boosts will have to be: not be than the volume in result on the day of determination enhanced in accordance to the yearly share boost of the Client Price Index for City Wage Earners and Clerical Staff and rounded to the nearest numerous of $.05.