On September 15, 2017, the Department of Labor issued a Notice setting forth the new minimum wage applicable to federal contractors covered by Executive Order 13658. Effective January 1, 2018, the hourly wage will increase from $10.20 per hour to $10.35 per hour. The wage rate for tipped employees will also increase to $7.25 per hour. Covered contractors must advise their employees of the increase.
Executive Order 13658 applies to all contracts, contract-like instruments, or solicitations issued, in most cases, after January 1, 2015. The covered contracts include the following:
- procurement contracts for services or construction;
- contracts for services covered by the Service Contract Act;
- contracts for concessions; or
- contracts entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public; and if
- the wages of workers under such contracts are governed by the Fair Labor Standards Act, the Service Contract Act, or the Davis-Bacon Act.
While the increase isn’t very large, employers must ensure that they comply, especially those employers with a large number of covered employees.