The U.S. Department of Labor recently announced an increase to the minimum wage for federal contractors.
Beginning January 1, 2018, the minimum wage for federal contractors performing work on covered contracts increases to $10.35 per hour from the current rate of $10.25 per hour. The required minimum cash wage that must be paid to tipped employees working on or in connection with covered contracts will increase to $7.25 per hour from the current rate of $6.80 per hour to $7.25 per hour.
These increases are required by Executive Order (EO) 13658, which was issued in 2014 by then-President Barack Obama.
EO 13658 applies to a wide range of federal government contracts for service and construction. It applies to new contracts and replacements for expiring contracts with the federal government that result from solicitations issued on or after January 1, 2015, or to contracts awarded outside the solicitation process on or after January 1, 2015.
The order generally extends to four major categories of contractual agreements:
- Procurement contracts for construction covered by the Davis-Bacon Act;
- Service contracts covered by the Service Contract Act (SCA);
- Concessions contracts, including any concessions contract excluded from the SCA by the Department of Labor’s regulations at 29 CFR 4.133(b); and
- Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents or the general public.
More information on this minimum wage rate can be found on the Department of Labor’s website.
Minimum wage rates are on the rise at both the state and the local levels. Members can find more information on HR California’s Minimum Wage page and Local Ordinances Home. Not a member? See how CalChamber can help you.