The US Department of Labor (DOL) has announced an increase in the minimum wage rate for workers on federal construction and service contracts effective January 1, 2016. The minimum wage rate will increase from the current rate of $10.10 per hour to $10.15 per hour. The minimum cash wage for tipped workers will increase from $4.90 per hour to $5.85 per hour.
The minimum wage rate increase for employees of federal contractors was initiated by an Executive Order signed by President Obama in 2014. The initial minimum wage rate increase went into effect January 1, 2015. The Executive Order and the US DOL’s implementing regulations require the federal contractor minimum wage rate to be adjusted annually based on the increase in the Consumer Price Index (CPI) over the prior year.
The Executive Order minimum wage requirement applies to all contracts for construction covered by the Davis-Bacon Act; contracts for services covered by the Service Contract Act; concessions contracts, such as contracts to furnish food, lodging, automobile fuel, souvenirs, newspaper stands, and/or recreational equipment on Federal property; and contracts to provide services, such as child care or dry cleaning, in Federal buildings for Federal employees or the general public.
Posters that feature the federal contractor minimum wage rate will be updated when the US DOL releases the updated minimum wage posting later this year. Stay tuned!