Seyfarth Synopsis: Employees on certain government contracts must be paid in accordance with the requirements of a 2014 Executive Order on Minimum Wage. Effective January 1, 2019, the minimum wage for covered workers is $10.60 per hour, with a minimum direct wage of $7.40 per hour for tipped employees.

In 2014, President Obama issued an Executive Order establishing a minimum wage for certain federal contractor employees, and requiring that the minimum wage be adjusted on an annual basis. That Executive Order continues to be in effect, and, in the September 4, 2018 Federal Register, the Department of Labor’s Wage & Hour Division announced that the wage rate will increase to $10.60 per hour. The minimum cash wage for covered tipped employees will increase to $7.40 per hour.

Workers performing on or in connection with covered contracts must be paid these new rates beginning January 1, 2019. We discussed many of the applicable definitions and coverage issues in our prior coverage.