Effective January 1, 2017, the minimum wage to be paid to workers performing work on or in connection with Federal contracts covered by Executive Order 13658 will be $10.20 per hour. The U.S. Department of Labor announced the increase in the federal contractor minimum wage in today’s Federal Register.

The increase means that wage determinations under the Service Contract Act and Davis Bacon Act will now have a “floor” of $10.20 per hour, and service employees performing work on federal contracts subject to the Executive order but not covered by wage determinations will also see their wages rise to $10.20 per hour.

The U.S. Department of Labor’s notice also sets the 2017 cash wage to be paid to tipped employees performing work on or in connection with covered contracts (such as wait staff and other tipped employees at federal park concessions and the like) at $6.80 per hour.

Contractors and subcontractors affected by the minimum wage increase should begin planning now to implement the changes starting January 1, 2017.