On Aug. 27, ABC submitted comments to the U.S. Department of Labor’s Wage and Hour Division in response to its notice of proposed rulemaking to increase the minimum wage for federal contractors.
In accordance with President Biden’s Executive Order 14026, Increasing the Minimum Wage for Federal Contractors, WHD issued a proposal that will require all agencies to incorporate a $15 minimum wage for all federal contractors in new contract solicitations beginning Jan. 30, 2022, and implement the minimum wage into new contracts by March 30, 2022. Additionally, the proposal states all agencies must raise the minimum wage annually by an amount determined by U.S. Secretary of Labor Marty Walsh beginning Jan. 1, 2023.
In its comments, ABC stated that most of ABC’s contractor members engaged in private construction and government construction already pay the substantial majority of their employees at wage rates higher than the newly proposed minimum wage of $15 per hour, because construction is a high-wage industry, and because of the requirements of the Davis-Bacon Act —and to a lesser extent the Service Contract Act—on government contracts. The primary concern in these comments is not the wage rate itself, but rather the unlawful arrogation of power by the executive branch to set a new minimum wage in direct contravention of the above-referenced acts of Congress. The department’s proposed rule will cause great confusion among government contractors and will needlessly increase the regulatory burden on contractors in the construction industry. Therefore, the NPRM should be withdrawn or substantially modified to avoid imposing any new minimum wage that is different from the minimum wages dictated by Congress.
ABC also urged DOL to modify the proposal to achieve greater conformity with the DBA and SCA in a way that is administratively prudent for the department and entirely consistent with the requirements under EO 14026, as this will minimize confusion for government contractors.
More information on the proposed rule can be found in an analysis issued by ABC National’s general counsel, Littler Mendelson, P.C.
ABC will continue to provide updates on this rulemaking in Newsline.