DOL Announces Final Rule to Increase Minimum Wage for Federal Contractors

On April 27, 2021, President Biden signed Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors,” which raises the hourly minimum wage paid for workers on certain federal contracts to $15. In July, the Department of Labor (DOL) issued a proposed rule to implement the Executive Order. Today, the DOL announced a Final Rule implementing the increased minimum wage. The Final Rule becomes effective January 30, 2022 and includes the following new requirements:

  • Increases the hourly minimum wage for certain federal contractors to $15
  • Indexes the minimum wage to an inflation measure in future years as determined by the Secretary of Labor
  • Eliminates the tipped minimum wage for federal contractors by 2024
  • Extends the new federal minimum wage to federal contract workers with disabilities whose wages are calculated pursuant to special certificates issued under section 14(c) of the FLSA
  • Provides minimum wage protections to outfitters and guides operating on federal lands

The DOL estimates that in the first year of implementation, over 327,000 workers will be impacted by the Executive Order and Final Rule and receive an increased hourly wage. The attorneys at Phelps Dunbar can assist employers navigating these new requirements.