As discussed in greater detail on the Jackson Lewis website here, this week the Department of Labor published its Proposed Rule implementing the minimum wage increase for federal contractors ordered by the President through Executive Order earlier this year. Under the EO, the minimum wage for work covered by the Davis-Bacon Act or Service Contract Act, for concessions contracts and contracts in connection with federal lands or employees increases to $10.10/hour effective January 1, 2015, with the tip credit wage set at $4.90 (as juxtaposed with the tip credit wage under the Fair Labor Standards Act of $2.13/hour) with increases to the tip credit rate through time to bring it up to 70% of the full minimum wage.
“For many if not most contractors, this is a tempest in a teapot,” observed Jackson Lewis Affirmative Action Shareholder and public contracting authority, Eric Felsberg. “In most sectors that service the federal government, wage rates are above even this revised level. Food service to the government may be an exception particularly as concerns the tip credit.”
Employers contracting with public entities must continue to analyze their prevailing wage obligations under federal, state and municipal prevailing wage statutes and the applicable contracts.