Department of Labor Issues New Minimum Wage for Federal Contractors

Randi Klein Hyatt
Randi Klein Hyatt

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.

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