On July 21, the U.S. Department of Labor announced a proposed rule that would require federal contractors to pay a $15 minimum wage to workers on or in connection with a federal government contract. The public has until Aug. 23 to comment on the proposal.
Beginning Jan. 30, 2022, Executive Order 14026, Increasing the Minimum Wage for Federal Contractors, requires all agencies to incorporate a $15 minimum wage in new contract solicitations and to implement the minimum wage into new contracts by March 30, 2022. Agencies must also implement the higher wage into existing contracts when the parties exercise their option to extend such contracts, which generally occurs annually. The minimum wage will continue to be indexed for inflation.
Ben Brubeck, ABC’s vice president of regulatory, labor and state affairs, issued the following statement when President Biden announced the order on April 27:
“ABC has long held that the market should determine wages in the construction industry, where well-paying merit shop construction jobs sustain the careers of 87.3% of the workforce. In general, ABC’s government contractor members pay wage rates substantially higher than $15 per hour under the requirements of the Davis-Bacon Act and, to a lesser extent, the Service Contract Act. The primary concern with this executive action is not the wage rate itself but rather the unlawful and unprecedented power grab by the executive branch to set a new minimum wage in direct contravention of the DBA and SCA.”
In Feb. 2014, the Obama-Biden administration’s Executive Order 13658 required federal contractors to pay employees working on federal contracts $10.10 per hour, subsequently indexed for inflation. Currently, the minimum wage for workers performing work on covered federal contracts is $10.95 per hour.
ABC will continue to provide updates on this important issue in Newsline.