Yesterday, the US Department of Labor (DOL) announced its notice of proposed rulemaking to raise the hourly minimum wage rate for employees of federal government contractors and subcontractors to $10.10 per hour beginning January 1, 2015. The proposed rule implements President Obama’s Executive Order 13658 establishing new minimum wage requirements for federal contractors.
Under the proposed rule, the general minimum wage rate starts at $10.10 per hour effective January 1, 2015. Beginning January 1, 2016, and each year thereafter, the minimum wage rate will be recalculated based on the Consumer Price Index and published annually in the Federal Register. Beginning January 1, 2015, tipped employees working under covered contracts must be paid for $4.90 per hour. Each succeeding year the tipped minimum wage rate will increase by 95 cents until it equals 70% of the general minimum wage rate.
Other key provisions of the proposed rule provide guidance and set standards for covered employers. These include:
- key term definitions, coverage and exclusions
- contractor obligations such as rate of pay, overtime and recordkeeping
- rates of pay for tipped workers and workers with disabilities, and
- the enforcement process and remedies.
The proposed rule covers four major categories of contractual agreements:
- contracts for construction
- service contracts under the Service Contract Act
- concessions contracts, and
- contracts entered into by the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents or the general public.
Interested parties will be able to submit comments at http://www.regulations.gov once the proposed rule is published in the Federal Register. The regulation identification number is 1235-AA10. Comments must be received within 30 days following publication. The department will issue a final rule by October 1, 2015.