Article Contributed by Mark Adams
The United States Department of Labor has issued its final rule to increase the federal minimum wage on the part of covered federal contractors and subcontractors. The rule implements requirements set forth by Executive Order 14026.
The final rule (which can be viewed and downloaded here) is effective January 30, 2022 and increases the hour minimum wage to:
- $15.00 per hour beginning January 30, 2022;
- $10.50 for tipped workers (provided that tips received are enough to equal or surpass $15.00 per hour); and
- beginning January 1, 2023, and annually thereafter, an amount determined by the Secretary of the Department of Labor pursuant to the Executive Order.
A contractor may not discharge any part of its minimum wage obligation on the basis of furnishing fringe benefits.
The rule applies to four major categories of contracts:
- procurement contracts for construction covered by the Davis-Bacon (DBA);
- service contracts covered by the Service Contract Act (SCA);
- concessions contracts, including concessions contracts excluded from SCA coverage; and
- 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.
Covered contractors and subcontractors must retain records for three years and make available for inspection to the Us Department of Labor Wage and Hour Division upon request:
- Name, address, and social security number of each worker;
- The worker’s occupation(s) or classification(s);
- The rate or rates of wages paid;
- The number of daily and weekly hours worked by each worker; and
- Any deductions made; and (6) The total wages paid.
The rule requires contractors to notify all workers performing work on or in connection with a covered contract of the applicable minimum wage rate under EO 14026. The notification requirement can be met through a posting and the DOL has a model poster that can be found on the last page of the final rule.
Contractors not in compliance can be subject to civil action to recover underpayments, and be disbarred from future federal contracts or subcontracts for a period of up to three years.