On February 12, 2014, President Obama issued an executive order raising the federal minimum prevailing wage to $10.10 per hour for employees working on certain federal contracts.

Executive Order (EO) 13658 applies to employees working under four main categories of federal contracts:

  1. procurement contracts;
  2. service contracts;
  3. concessions contracts; 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 final rule was released on October 1, 2014. The increased minimum wage goes into effect January 1, 2015, for all new and renewed contracts, and will be subject to annual adjustment for inflation.

ACTION ITEM

Employers with federal contracts that are covered by EO 13658 should work with their payroll and personnel systems to ensure a smooth transition to the higher minimum prevailing wage on January 1, 2015.