Federal contractor minimum wage to rise to $15 an hour
Dive Brief:
- The U.S. Department of Labor announced Monday a closing rule applying President Joe Biden’s government get increasing the federal contractor bare minimum wage from $10.95 to $15 an hour. The last rule retains the Jan. 30, 2022, deadline by which organizations must include the new level into new agreement solicitations.
- The necessities apply to federal contractors that accomplish operate in all 50 U.S. states as effectively as U.S. territories, Jessica Looman, performing administrator of DOL’s Wage and Hour Division, explained for the duration of a media briefing Monday. It also finishes the tip credit as nicely as the subminimum wage provision for specific employees with disabilities.
- The new amount does not utilize to qualified federal contracts entered into before Jan. 30, 2022, but will utilize to extensions of this kind of contracts finalized following the deadline. Beginning Jan. 1, 2023, the least wage will maximize yearly by an amount decided by the Secretary of Labor. Looman explained the company would shortly provide steering and educational outreach to contractors on how to apply the rule.
Dive Perception:
The legislation’s result on construction firms will most probable be negligible, as most building firms that do small business with the federal federal government now pay out personnel at wage prices larger than the $15 for each hour minimum amount founded in the rule, said Ben Brubeck, Involved Builders and Contractors vice president of regulatory, labor and condition affairs, in a press assertion.
It has been just about four months considering that DOL posted its proposed rule employing Government Purchase 14026, which Biden issued in April.
Questioned as to no matter whether the implementation of the order would lead to excessive expenditures for contracting companies, Looman mentioned public comments on the proposal ended up “largely pretty constructive” and that the agency has been in get hold of with the Modest Small business Administration in creating guidance material specifically for tiny companies. She pointed out that when an agency enters a contract, it must pay back for the services delivered.
“We want to make certain we are leveraging the getting electrical power of the federal govt to assure good wages for staff,” Looman said. “Mainly because we are spending pounds on federal contracts, it definitely is our career to ensure wages are fair.”
In a tweet Monday, the company explained far more than 50 % of the workers benefiting from the wage increase purchase were being females, when 25% were being Hispanic and 15% ended up Black. Looman said that whilst the agency did not have a fantastic estimate of all the employees that could be impacted by the rule, people in the childcare, cafe and maintenance industries would most likely be impacted in states and localities exactly where bare minimum wages had not not too long ago enhanced.
We’re boosting the wage for countless numbers of federal contractors to improve the financial protection of countless numbers of households and reverse many years of earnings inequality. https://t.co/Ut4kPPLWAe pic.twitter.com/6WUSVIMtro

— U.S. Division of Labor (@USDOL) November 22, 2021
Looman also stated the rule could be found as a “continuation of the evolution of the federal governing administration working with its getting ability to improve wages,” citing former President Barack Obama’s 2014 executive order — and subsequent closing rule — boosting the federal contractor least to $10.10 an hour.
A actuality sheet on the rule famous that specified contracts are excluded from the necessities, together with grants inside the that means of the Federal Grant and Cooperative Agreement Act specified procurement contracts for building that are not matter to the Davis-Bacon Act and certain contracts for companies that are exempted from protection underneath the Service Agreement Act or its implementing regs, amid some others.
As element of the regs, contractors have to fulfill detect-and-posting needs by, for case in point, putting up the relevant wage willpower in a notable and available location at the worksite, according to the truth sheet.
Future boosts to the bare minimum have to be decided by the Secretary of Labor and published at minimum 90 days right before they acquire result. The rule even further specifies that these raises have to be: not be than the sum in influence on the day of willpower amplified according to the annual proportion increase of the Customer Cost Index for City Wage Earners and Clerical Staff and rounded to the closest a number of of $.05.
