DOL Issues Final Rule Increasing Federal Contractor Minimum Wage

On Nov. 22, the U.S. Department of Labor’s Wage and Hour Division issued its final rule implementing President Biden’s Executive Order 14026, Increasing the Minimum Wage for Federal Contractors, which applies to all workers performing work on or in connection with covered federal contracts. The minimum wage will increase to $15 per hour beginning Jan, 30, 2022, superseding a scheduled increase to $11.25 that will occur on Jan. 1 under EO 13658, Establishing a Minimum Wage for Contractors.

“Most of ABC’s federal contractor members already pay the vast majority of their workers at wage rates higher than the $15 per hour minimum established in this rule,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a press release in response to the final rule. “However, ABC is concerned with the Biden administration’s decision to ignore Congress’s authority and not establish a market-driven approach to wage determination. This rulemaking will create unnecessary confusion and needlessly increase the compliance burden on ABC member contractors that build America’s infrastructure and perform other federal or federally assisted work.”

According to a DOL news release, in addition to increasing the minimum wage for federal contractors, the final rule:

  • Continues to index the federal contract minimum wage in future years to inflation;
  • Eliminates the tipped minimum wage for federal contract employees by 2024;
  • Ensures a $15 minimum wage for workers with disabilities performing work on or in connection with covered contracts; and
  • Restores minimum wage protections to outfitters and guides operating on federal lands. 

More information and resources on EO 14026 and the final rule, including a list of FAQs, a fact sheet on EO 14026 and side-by-side comparison of EO 13658 and EO 14026, can be found on the DOL website.

On Aug. 27, ABC submitted comments to the WHD in response to the agency’s proposed rule.