On September 19, 2019, the Department of Labor announced minimum wage increases for individuals who work on or in connection with federal contracts. Beginning January 1, 2020, covered workers must be paid a minimum of $10.80 per hour and covered tipped employees must be paid a cash wage of at least $7.55 per hour.
Executive Order 13658, which was signed in 2014, raised the hourly minimum wage for individuals working on or in connection with federal contracts. The Order requires the Secretary of Labor to issue new minimum wage rates for covered employees on an annual basis. The Secretary makes a determination based on inflation increases to the minimum wage rate.
Federal contractors should determine if their workforce is affected by these changes, being mindful that minimum wage increases affects not only individuals who directly perform work on a federal contract, but also individuals who perform work in connection to the contract. Individuals performing work in connection to a government contract may not perform the specific services called for by the contract but still perform work activities that are necessary to the performance of the contract. Please also note that federal government contracts may also be governed by additional obligations pursuant to a Local Area Wage Determination under the Service Contract Act or similar laws.
The Federal Register notice of the minimum wage increases and worker’s rights poster can be found here: https://www.federalregister.gov/documents/2019/09/19/2019-19673/establishing-a-minimum-wage-for-contractors-notice-of-rate-change-in-effect-as-of-january-1-2020.
Please do not hesitate to contact us if you have questions or concerns related to the minimum wage increases.
Contact info: Meredith S. Campbell Chair, Employment and Labor Group, Shulman Rogers [email protected] | T 301.255.0550 | F 301.230.2891