US DOL Announces Federal Contractor 2017 Minimum Wage Rate and Paid Sick Leave Benefits

Minimum Wage

Two important announcements regarding federal contractors came from the U.S. Department of Labor (DOL) in September. First, on September 20, 2016, the DOL published a notice that the minimum wage for employees working on certain government contracts will increase to $10.20 per hour beginning January 1, 2017, pursuant to Executive Order 13658, Establishing a Minimum Wage for Contractors. Tipped employees performing work on or in connection with such contracts must be paid a cash wage of at least $6.80 per hour as of January 1, 2017. Each year, the DOL determines the federal contractor minimum wage rate based on the increase in the Consumer Price Index over the preceding year.

Paid Sick Leave

On September 30, 2017, the DOL also issued the implementing regulations of Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. Beginning January 1, 2017, the regulations require covered federal contractors to provide their employees with up to 7 days (56 hours) of paid sick leave annually. Employees may use paid leave for their own illness, injury or medical condition or for preventive care, to care of a family member with a health condition, and for absences resulting from domestic violence, sexual assault and stalking.

Covered Workers

Coverage of employees under the minimum wage and paid sick leave regulations is nearly identical. The minimum wage and paid sick leave regulations both apply to workers performing work on or in connection with a covered contract whose wages are governed by the McNamara-O’Hara Service Contract Act (SCA), the Davis-Bacon Act (DBA), or the Fair Labor Standards Act (FLSA). However, employees who are exempt from the FLSA’s minimum wage and overtime provisions, and certain U.S. Postal Service workers, are entitled to paid sick leave.

Covered Contracts

The minimum wage increase and the paid sick leave regulations apply to new or replacement contracts solicited or awarded on or after January 1, 2017. The four major categories of covered contracts are:

  1. procurement contracts for construction covered by the DBA;
  2. service contracts covered by the SCA;
  3. concessions contracts, including any concessions contract excluded from the SCA by the DOL’s regulations at 29 CFR 4.133(b); and
  4. contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

The regulations also apply to subcontracts of covered contracts. The regulations do not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the Federal Government, including those subject to the Walsh-Healey Public Contracts Act (PCA).

Notice and Posting

In addition to general federal and state required workplace postings, federal contractors have several special posting responsibilities, including posting a notice informing employees of the new minimum wage and paid sick leave benefits. The complete list of federal contractor postings includes:

  • New Workers Rights Under Executive Order 13658 (Federal Minimum Wage for Contractors)
  • New Worker Rights Under Executive Order 13706 (Paid Sick Leave for Federal Contractors)
  • SCA or DBA posting (as required)
  • National Labor Relations Act (NLRA)
  • “EEO is the Law” Poster Supplement
  • Pay Transparency Nondiscrimination Provision
  • FHWA Federal-Aid Highway Construction Notice (Construction contracts)
  • Employee Rights for Workers with Disabilities/Special Minimum Wage Poster
  • Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)

Compliance Poster Company exclusively offers two poster options that fulfill these federal contractor special posting requirements: the Federal Service and Manufacturing Contracts Poster and the Federal Construction Contracts Poster. CPC is already in the process of updating our federal contractor posters to include the new Minimum Wage and Paid Sick Leave postings. It’s an easy compliance solution and a great value!

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